Just one in 10 switches bank despite hike in charges
TINY numbers of people are switching banks despite a huge hike in account charges and the decision of ACC and Danske Bank to pull out of retail banking here.
Just one in 10 consumers have moved bank account in the last year, new figures show.
This is despite bank customers being frustrated by the service they are getting and conscious of higher transactions charges, according to the research carried out by Amarach for Permanent TSB.
Only small numbers have plans to ditch their bank and opt for a new one in the next year, the survey found.
Most people expect to end up paying between €50 and €100 a year for their day-to-day banking.
Banks have ramped up the charges on current accounts this year. AIB charges fees of up to 35c per transaction if current account holders fail to maintain a balance of at least €2,500.
Bank of Ireland has a quarterly fee of €5 whether or not the account is in balance.
And customers are hit by fees of up to 40pc per transaction if they fail to keep at least €3,000 in the account throughout the quarter.
Ulster Bank charges €4 a month unless customers lodge at least €3,000 into their account or maintain a balance of at least €3,000 in their account.
The new survey found consumers are turning their backs on switching bank accounts, despite the main banks competing hard for new customers left without banking facilities due to the decision of Danske Bank to shut its retail operations here.
And ACC Bank has decided to close down and hand back its banking licence to the Central Bank.
Economist and expert in household finances Dr Michael Dowling from Dublin City University said householders were missing out on massive savings by failing to switch the likes of bank accounts and health insurance.
"For all the protests about the coming water charges, we are pouring similar amounts of money down the drain with unnecessary and pointless bank charges," warned Dr Dowling.
He said a major new bank-switching campaign in the UK, that introduced a no-hassle current account opening process, led to much greater choice and large savings for customers.
"For this reason, it is important that we now have simpler switching in Ireland."
Dr Dowling said that those who have switched bank account were positive about the experience, but many people see moving bank as huge hassle.
"The experience of bank account switchers continues to be positive.
"However, removing perceived barriers and increasing the level of choice available will be key to generating momentum in the sector and unlocking the value to be had for consumers," he said.
The Amarach research found that those switching a whole range of suppliers were more likely to take a holiday. These people were labelled "power switchers".
Six out of 10 power switchers said they would take a foreign holiday this year.
Power switchers are more likely to be male and aged under 35.
Those who have never switched a household bill are the least likely to be taking an overseas holiday.
This group is more likely to be female and aged under 35.
The research claimed that those who switch for better value on a regular basis can save up to €1,600 a year, especially when it comes to health insurance and banking.