Consumer loyalty may cost you €1,100 in next 12 months

Irish consumers could save more than €1,100 over the next 12 months by switching a range of service providers, but despite the scale of savings available and the best intentions to be more proactive, most people will not move, a new survey has found.

According to the price comparison website Switcher.ie, as many as two-thirds of consumers say they plan to switch at least one of their current service or utility providers in the next 12 months but it suggests that the majority will not act on their plans.

When asked if they planned to switch services, one-third of consumers said they would change motor insurance and electricity providers, while a quarter said they had plans to switch broadband provider. One in five said they would switch home insurance. Smaller numbers of between 10 and 20 per cent said they were considering switching mobile phone operator, television provider and gas supplier.

Consumers said they were attracted by the prospect of better value. However, providers are unlikely to be losing any sleep as the survey also suggests most people will not go ahead with their switching intentions.

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It shows that 68 per cent of the more than 1,000 people polled had been thinking about switching a utility or service provider in the past but decided not to do it despite the potential savings on offer.

Perceived hassle

The main reason people gave for not going ahead with switching was that it seemed like too much hassle, with 42 per cent of those polled suggesting that was why they stayed put. Significant numbers also said they didn’t switch because they couldn’t tell if a new supplier would save them money, while fears over being locked into a contract and uncertainty as to what product was better value stopped others making any moves. A further one in 10 people said they were frightened of losing their service or getting cut off.

The survey suggests that there is confusion among consumers about when they’re actually free to switch, with 17 per cent wrongly believing that – even if they’re outside of their contract’s minimum term – they aren’t free to switch because they still have a contract with their current provider.

Customers who don’t switch regularly will be long gone off any discounted rates they may have availed of when they first signed up, and although some providers offer ongoing year-on-year discounts, these generally won’t be as high as the discounts offered to new customers.

This means people who haven’t switched in a while could be missing out on potential savings on the likes of energy, insurance, broadband and TV, and phone services.

"It's great that such a high percentage of consumers are considering switching this year – but we're concerned that this could be all talk and little action," said managing director of Switcher.ie Eoin Clarke. "Switching offers us the chance to take back control of our spending and get more bang for our buck, but unfounded fear factors are preventing many from going through with planned switches, which means missing out on savings of over €1,150."

He said the most important thing consumers needed to be aware of was that simply sticking with an existing supplier “particularly if you’ve been with them for a long time already, will frequently land you with a higher bill than if you shopped around”.

Savings you can make

Gas and electricity: Deals offering between 15 and 20 per cent off the standard rates of gas and electricity can be found which could amount to savings of in excess of €300 in the first year.

Health insurance: Anyone who has not changed plan for more than two years is almost certainly spending more than they need to and savings of at least €300 could be made without the loss of any cover.

Television and broadband: With broadband and television providers always anxious to attract new business, consumers who switch could see their annual bills fall by over €200.

Car insurance: Depending on the driver, knocking €200 off the annual cost of a fully comprehensive policy should be easy to do.

Phone bills: By changing from one provider to another, many consumers could shave at least €10 a month of their bills – which amounts to an annual saving of €120.