New research shows that switching key household bills saves the economy up to €1.8 billion annually, according to the latest permanent tsb Switching Index, which was launched today.
Even though consumers are feeling hard pressed, switching levels in general have remained constant across all sectors, quarter on quarter
commented Gerard O’Neill, from Amárach Research.
There is huge potential for consumers to save hundreds of millions of euro by switching service providers, yet despite this potential, many Irish consumers remain reluctant to switch. On one end of the spectrum, two thirds of us (65%) have switched car insurance providers, while at the other end, just over one in four (27%) have switched banks.
The research tells us that reducing spend on luxuries was the main money saving tactic adopted by Irish people in 2013, while switching to discount retailers also helped consumers’ pockets. However, the reality is that if more people adopted a switching habit, they could probably afford that holiday or other luxury purchase that they have sacrificed – there are annual savings of over €1,200 to be had.
The permanent tsb Switching Index also points to the rise of the ‘Power Switcher’ - a new breed of financially savvy citizen, who save themselves over €1,200 a year by switching their purchases of key services. The latest permanent tsb Switching Index reveals that one in six of us are ‘Power Switchers’ – who have switched our mobile phone, electricity, car insurance, broadband and banks at least once in our lives.
‘Power Switchers’ are slightly more likely to be men (55%) with two thirds in employment (65%) and are more likely to believe they are in better control of their own finances, with a stronger than average desire for success.
Financial economist and expert in household finances, Dr Michael Dowling from DCU described ‘Power Switchers’ as a new breed of consumer created by the recession, who has turned switching into an art form.
These are the under-35s, often living in urban areas and they have a switching habit. Evidence from other countries suggests they are wealthier and more educated. They switch multiple providers each year - a standard approach of the Power Switcher is to pick one day a year when they sit down and ponder the necessity and amount of each of their bills. Then they threaten their existing providers with desertion unless their bills are lowered, and promptly leave the providers who don’t comply. Power switchers are essentially early adopters – service providers should ignore them at their own peril as they are influential in their peer groups and where they go, others soon follow.
Based on research conducted by Amárach Research on behalf of permanent tsb, the Switching Index is designed to compare and contrast consumer loyalty and satisfaction across a range of household necessities and to explore the reasons why consumers switch in each area, why they don’t, as well as their overall attitudes to money. The research was carried out amongst a nationally aligned sample in January 2014.
The Switching Index – the score which reflects a consumer’s ability and appetite to move between providers, taking into account factors including customer satisfaction levels, the choice of alternative providers available and the impact of price increases – was highest for car insurance (58 out of a possible 100), followed by mobile phone (57), broadband (54), electricity (51) and banking (47).
First published in November 2013, the research again confirms bank customers as the most reluctant to consider switching - only 16% are ‘likely’ to switch in the next twelve months, as against the 65% of car insurance customers who are open to shopping around. This is despite the perception by more than half (54%) that bank charges are rising.
Research released by the National Consumer Agency last week has found that one third (34%) of current account customers said they no longer qualify for free banking.
Further highlights of the permanent tsb Switching Index include the following:
Niall O’Grady, Director of Transactional Banking, Savings and Investments in permanent tsb said:
Since the beginning of the year, more than 10,000 customers have come over to the new permanent tsb current account to avail of banking without senseless fees, and over 2,000 of these came to us from Danske Bank. We are thrilled to see that most customers who switched banks have rated the process as smooth and easier than they expected. Our focus is to keep making it easy for new customers to join this momentum.
Last year, permanent tsb bucked the trend of other Irish banks who have started pushing up current account fees, by introducing banking without senseless fees - no quarterly or day to day transaction fees and no minimum balance to be maintained when a customer lodges €1,500 per month. There is a €12 quarterly fee if you don’t lodge €1,500 a month. Other transaction charges may apply.
More than 40,000 customers have opened a current account with permanent tsb in 2013 and more than 10,000 customers since the beginning of 2014.
Find out if you are a ‘Power Switcher’ and how much you stand to save. Tweet us your switching stories at @askpermanenttsb or use our hashtag #switchandsave
Case studies available upon request.
The permanent tsb Switching Index is a new report designed to compare and contrast consumer loyalty across a range of household necessities and to explore the reasons why consumers switch in each area, as well as their overall attitudes to switching, spending and saving.
Amárach Research has worked with permanent tsb to design a measure of just how ready, willing and able Irish consumers are to switch suppliers across a range of household necessities. The sectors covered are electricity, broadband, car insurance, mobile phone providers and banking.
The permanent tsb Switching Index is based upon consumer responses to the following questions:
The answers to these questions are then combined to create the permanent tsb Switching Index for each category. The Index ranges from 0 to 100 - the closer the Index is to zero then the lower the probability that consumers will switch in a particular category, while the closer it is to 100 then the greater the likelihood they will switch.
Research was carried out by Amárach Research, through an online survey, conducted amongst 1001 adults aged 15+. Quotas were set on gender, age, social class and region to achieve a sample aligned with the national population. Interviewing fieldwork was conducted in January 2014.
With permanent tsb’s current account, customers can avoid quarterly fees, direct debit fees and day-to-day transaction fees. Details as follows:
Terms and conditions apply. Generally interest is subject to Deposit Interest Retention Tax (DIRT) at the prevailing rate but is subject to change.