The great switching divide

By THIS IS MONEY
Updated:

 

THE oldest and poorest customers are least likely to abandon companies they are not happy with or to search for better deals, research out today shows.

This is despite a general upturn in the number of people changing their service providers, the National Consumer Council said.

Mortgages are the fastest rising area of consumer switching, the group found. The number of people changing their mortgage provider has risen by 158% since 2000.

This compared with a 17% rise in the number of customers moving banks over the same period, with only 7% of customers swapping company this year.

The NCC's Active Consumer Index was based on research carried out among gas, electricity, fixed telephone, current account, mortgage and home insurance customers.

It found a 52% overall rise in consumer switching since 2000. But the NCC warned that the growth in 'consumer power' did not affect all service users.

The richest and youngest customers are twice as likely to switch their home insurance provider as the oldest and least well-off, the group said.

'Beneath the positive headline trend of smooth changeovers and happy customers, problems still lurk - especially for the oldest and poorest,' an NCC spokeswoman said.

 
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The group is calling on the regulator for each of the six markets to promote the benefits of switching and remove barriers to competition.

It is warning customers to beware of 'lock-in' practices which persuade them to stay with an uncompetitive provider. These include early exit charges and planned incompatibilities in new equipment.

The NCC Active Consumer Index is based on a survey of 400 to 500 customers in each of the six sectors carried out by FDS International Ltd.

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