According to recent national research by Queensland University of Technology (QUT) on behalf of Heritage Bank, we’re collectively wasting more than $11 billion a year by not acting on our intentions to switch banking, insurance, grocery and utilities providers.
The national research found that more than 50% of Australians had seriously considered switching their providers for those services – but less than 25% acted on those intentions. This mirrors a previous consumer survey conducted by Canstar Blue, which found that while around one third of respondents don’t feel loyal to their financial institution, 57% explained that switching to a competing institution would take too much time and effort.
Nevertheless, the Heritage Bank-commission survey found that those who did shop around to find the best rates and services saved more than $2.5 billion per year. If the whole nation switched, Australians could save a staggering $11.6 billion per year.
According to the report, around 1 in 6 of the population don’t switch because they think it will cost too much. That is contrary to the report, which found people had made significant savings by switching. A third of those who switched home insurance providers saved more than $300; while switching grocery stores saved nearly 15% of people more than $1,000 per year.
Across all sectors, Australians are most likely to switch their energy provider (29%) and least likely to switch their credit card (17%) and home loan (18%).
Customers are far more likely to switch when potential savings are clear. Nearly 83% of Australians said they would switch their home loan if they could save around $3,000 per year and around 70% would move mobile phone providers to save at least $150 per year.
Commenting on switching habits of Australians, Dr Juliana Silva-Goncalves from Queensland University of Technology, says: “It’s interesting to see apathy as the key barrier to switching across such a wide range of industries. This belief it’s too hard to switch and too costly, is stopping households from saving thousands of dollars. We expect this trend to change and the amount of people switching to significantly rise over the next year with the expected economic downturn motivating people to shop around and become more savvy.