Irish consumers are missing out on savings of over €2,000 per annum by failing to shop around for better value on their household bills, according to new research published today.
Bank charges make up a significant proportion of this unclaimed pot of cash, however only around one in ten Irish consumers have switched their main current bank account in the past year, according to the research. This is despite the fact that eight out of ten Irish people underestimate the amount they pay in current account fees by as much as 50%.
Based on research conducted by Amárach Research on behalf of permanent tsb, the Switching Index examines consumer switching behaviour across a range of household bills, including main current bank account. The research was carried out amongst a nationally aligned sample in July 2014.
The research also shows that:
Commenting on the findings, Gerard O’Neill from Amárach Research said:
While consumer sentiment is finally starting to improve across the economy, Irish people should not fall back into old ‘Celtic Tiger’ habits of being complacent about shopping around for better value - and this includes household bills. Our research shows that 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, particularly in sectors including banking and health insurance.
Irish consumers are also lagging behind their UK counterparts when it comes to switching bank accounts and saving cash, according to financial economist and expert in household finances, Dr Michael Dowling from Dublin City University:
More than one million people have switched current accounts in the UK in the past year, following the launch of a government backed scheme to encourage switching in September 2013. This is in stark contrast to just over 14,000 people switching in Ireland under the Code of Conduct on the Switching of Current Accounts and comes against a backdrop of rising bank charges in this market. While some banks have already taken steps to make switching bank accounts more consumer friendly and while the experience of bank account switchers continues to be positive, we still need simpler switching in Ireland.
Niall O’Grady, Director of Transactional Banking, Savings and Investments in permanent tsb concluded:
Our research has consistently shown that the biggest savings for consumers are to be found in the sectors that are currently switched the least - health insurance and main bank current account. The bottom line is that Irish banking customers are continuing to pay significant fees by not shopping around. However when consumers do switch current accounts, our research shows that they rate the experience as positive and as good or better than expected with the majority feeling that this is something that they should have done long ago.
We’d encourage consumers to closely examine their bank statements for the fees that are creeping in and if they don’t like what they see, to give us a call.
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.
72,000 customers have opened a personal current account with permanent tsb since 1st April 2013.
With effect from 19th September, permanent tsb will be the only Irish bank without a minimum balance requirement as Ulster Bank remove the lodgement criteria from their current account which will affect approximately 50,000 of their customers.
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 April 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.
Award winning switcher team refers to our Contact Centre Management Association award. Details can be found on www.ccma.ie