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Stop the “loyalty” rip-off

Have you changed something recently?

It could be a policy or a financial agreement.

Anything like that.

Chances are that you have, because a survey by GoCompare shows that the last 10 years has been what they call “The Decade of Switching”.

In fact, an incredible 8 out of 10 UK consumers switched provider for at least one financial product between 2010 and 2020.

Biggest switch was car insurance, with more than half of UK adults (56%) switching their insurance provider.

In fact only 39% of us didn’t switch any of the most common financial products in just the last 12 months alone.

In the last decade, 8 out of 10 Brits switched at least one financial services product, according to the GoCompare Switching Report.

Now GoCompare is calling for the insurance renewal process to be reformed to protect consumers and help promote the benefits of switching for the next 10 years.

To mark the start of the new decade GoCompare looked at the Nation’s switching habits in the last 10 years.

Car insurance was followed by energy, home insurance and mobile phones.

A massive 57% of people surveyed said they were now more likely to switch providers to get a better deal than they were 10 years ago.

GoComp

The top 10 are:

1 Car insurance 56%.

2 Energy provider 50%

3 Home insurance 48%.

4 Mobile phone provider 48%.

5 Broadband 43%.

6 Current bank account 31%.

7 Land line phone provider 31%.

8 Credit card 27%.

9 ISA or savings account 23%.

10 Mortgage 13%.

The products that saw the biggest increase in switching activity over the last decade were energy (up from 9% in 2010 to 21% in 2019), mobile phones (up from 6% in 2010 to 17% in 2019) and broadband (up from 5% in 2010 to 14% in 2019) .

While the majority (79%) of people have changed providers for at least one of the most common financial products and services, 21% admitted to not switching any.

Over the last decade men were more tuned in to switching and saving than women.

In fact 82% of men changed financial providers compared to only 76% of women.

Looking at 2019 in isolation, 61% of people switched at least one financial product or service compared to just 51% in 2015.

Car insurance typified this trend with 28% switching in the last 12 months, compared to 19% in 2015.

GoCompare is campaigning for urgent action to be taken on insurance renewals to reduce the impact of so-called loyalty penalties which could be affecting millions of insurance customers, while trying to promote greater transparency and remove the barriers to switching.

As part of the campaigning, the comparison website is also calling for the cooling-off period for auto-renewals to be doubled to 28-days, for insurers to do more to help customers understand their options at renewal and to provider clearer information on the price of cover.

It is also recommending limiting or banning cancellation fees for customers who switch during the extended cooling-off period.

Lee Griffin, CEO and one of the founders of GoCompare said, “The rise of switching continues.

“The 2010s really were the Decade of Switching thanks to comparison sites, faster switching and greater intervention.

“As a result, consumers are now much more likely to change provider to get a better deal than they were a decade ago.

“We expect switching activity will continue to rise – partly due to the general economic uncertainty which continues around Brexit and potential price rises, and partly as a result of further regulatory moves to increase transparency and switching confidence.

“We’ve got a huge opportunity now to improve things for the next generation of switchers.

“The spotlight is well and truly on rip-off loyalty pricing tactics, which result in millions of existing customers paying more than new ones for the same cover.

“We think reforming the renewal process is the quickest way to improve things significantly for insurance customers.”