Tackle the cost of living crisis by making switching #1 priority
Majority of Brits missing out on savings for financial products despite rising cost of living.
- Shopping around for new deals on financial products is a stressful experience for almost half of UK consumers (44%), leading 69% to allow policies to auto-renew
- Only a quarter seek out better deals on products such as insurance, energy suppliers or phone contracts, despite 56% expecting to be worse off financially in six months
London, UK, 25 April, 2023: New research has revealed that the stress of switching suppliers means that many people are losing out when it comes to getting a better deal on products such as insurance, broadband and mobile phone contracts.
The survey of 1,500 Brits, carried out by Champions of Data and independent consumer data action service Rightly, revealed that 98% of people are concerned about the current economic situation - with 56% expecting to be worse off over the next six months. As the cost-of-living crisis takes hold, many people have reined in spending across a raft of essential items such as gas and electricity (77%) and groceries (75%), as well as perceived luxuries such as entertainment (81%) and travel (69%).
However, despite 85% of consumers being concerned about the rising costs of insurance policies and broadband contracts, the majority (75%) have not taken action to limit their spending on these products. Younger generations in particular are missing out on savings, with just 11% of 18 to 24-year-olds and 13% of 25 to 34-year-olds seeking out better deals with providers across the board.
James Walker, CEO at Rightly, comments, “Every year millions of pounds get wasted in automated renewals that don’t get challenged, causing people to pay a loyalty penalty and miss out, when money-saving options are right there. Anything that can help with the cost of living crisis should consider switching #1 priority.”
Failure to take action
While many of us shop around for better deals on products such as car insurance (53%) and home insurance (44%), the tedious and time-sucking nature of doing so means that many people simply give up. According to the research, 27% think it takes too much time and 26% simply can’t be bothered – leading over two-thirds to simply auto-renew on existing deals (69%), missing out on the possibility of a better deal as a result.
This back seat approach also means almost half rely on reminders from suppliers (42%) – rising to 52% in Wales - to know when their policies and contracts are up for renewal, rather than actively tracking it themselves.
Losing out to loyalty
For those that do choose to remain loyal and auto-renew with one provider, there has been a ban on so-called loyalty penalties for car and home insurance customers since the start of 2022 to prevent existing customers being charged more than new customers or customers who renegotiate on a new deal. However, it does not cover wider financial products such as phone contracts, broadband or health insurance, and a third of people are still unaware of the loyalty penalty (33%) and the impact it can have on them more widely by being charged higher prices as long-standing customers. Across the UK, those in the North East (41%), London (41%) and Northern Ireland (40%) are least likely to be aware of the loyalty penalty.
Overall, people are most likely to seek out a better deal if rates increased with their existing provider (23%) however the appeal of a quick and hassle-free process (21%) and having an easy and simple way to compare policies (15%) would encourage more people to make the switch.
Simplifying the process is particularly important given the emotional impact that comes with shopping around for a new deal, with almost half of consumers citing the stress it causes (44%) as a deterring factor for searching for a new deal. This rises to 51% amongst 18-24 year-olds.
To help people better manage this process, and not miss out on better deals, Rightly today announces the launch of Rightly Save, a new service which enables personalised, effortless renewal experiences, by putting the value of personal data at its core.
It allows people to personally benefit from the value of their own data, aiming to reduce the hassle and stress that comes with finding better deals on products such as insurance. It will launch with a simple and easy to use dashboard which monitors all existing policies and provides timely reminders to ensure people don’t miss out on securing a better deal.
“We have the vision for consumers to be able to take control of their data so that they can use it to their own benefit. This first phase of Rightly Save will make the complex process of renewals easier for people to manage, and in time we will be introducing steps to make the process of shopping for new policies effortless, removing the stress which so many of us associate with the process currently.” concludes Walker.
Key product features:
- Auto-detection of recurring payments: Identification of insurance policies within Google or Microsoft email inbox, automatically detecting recurring payment details accurately without the need to manually enter details.
- Renewal reminders at a time that makes sense: All reminders on renewals straight to the channel of the user’s choice; starting with email initially, and SMS, and/or calendar reminders to soon follow, removing the need to monitor for supplier updates and providing more time to shop around for alternative deals.
- A one-stop-shop: Collates all policies to make budgeting and saving money easier, plus the ability to add, edit and delete policies to stay organised.
Research was conducted via 3Gem in October 2022, interviewing 1,500 consumers aged 18-65+ in the UK.