Few plan to switch despite savings to be made
Published 25/05/2016 | 02:30
FEWER than one in ten adults who have a financial product plan to switch provider over the next year.
This is despite discounts and offers available for switchers and new customers, research commissioned by KBC Bank shows. The research found that 10pc of those with a current account, savings or mortgage plan to switch to another provider over the next 12 months.
And a third of all mortgage holders have no idea how much they could save over the term of their mortgage by moving to a different lender.
A typical mortgage holder could save €17,441 over the full life of the loan by switching, according to KBC. This is based on a €250,000 mortgage, over a 30-year term.
Savings of close to €50 a month are possible by moving from a bank charging 4pc to KBC's discounted rate of 3.65pc, based on also moving to the bank's current account.
High variable rates have seen a bill proposed by Fianna Fáil finance spokesman Michael McGrath make it through the first stage of the Dáil. It would give the Central Bank powers in cap rates. Banks charge existing customers up to 4.5pc interest on variable mortgages. The Eurozone average for new loans is close to 2pc.
KBC's research, carried out by Ignite, found that 65pc of mortgage holders said lower monthly repayments would be the most likely factor to make them switch.
Three out of 10 mortgage holders do not know how much they could save over the term of a mortgage if they changed provider.
The research found that 17pc believe they would not save anything if they switched.
Up to 37pc said if they saved money on their mortgage payments they would pay off other household bills and outgoings, with 30pc opting to save for a rainy day, and a quarter putting the savings towards a big buy, like a car, or going on holiday.
A huge majority of those polled said they had not switched bank in the last three years to get a better-value current account. Current account fees can cost up to €120 a year.
The survey found that 55pc said they would switch their current account for free banking or lower fees and charges, and 21pc for a bank that offers rewards and discounts.
Most adults questioned admitted to switching their mobile phone in the last three years. Four out of ten changed their car.
Close to a third changed their hairdresser/barber, and 9pc their partner.