More than 12 million have not switched any key household service in over three years, despite cost-of-living crisis, as consumers say there’s no difference between suppliers< Back to Newsroom
8th November 2023 - Millions of Brits are missing out on savings worth hundreds of pounds a year on their key household services as they think there’s no difference between suppliers and so do not switch, new research from Utility Warehouse (UW) reveals today.
The research, conducted by Opinium for UW among 3,000 Brits, suggests that the UK remains in a state of switching inertia as people continue to grapple with soaring prices.
Whilst three quarters (73%) of households are worried that the cost of household services could increase in the next 12 months, just over 1 in 5, or 8.6 million households, admit to not seeking a better deal for their energy, broadband, mobile or home insurance services as they think all suppliers are “essentially the same”.
Other reasons for not switching include concerns that switching is too complicated (16%), takes too long (15%), is too stressful (15%) or early exit fees are too prohibitive (14%).
The lack of switching means more than a quarter of households (26%), or 12.7m people, have not changed any of their energy, broadband, mobile or insurance providers in over three years - even though there are better deals in the market.
Households who don’t switch are missing out on savings of more than £200 a year on average compared to those who do, which could be costing the nation an estimated £2.5bn1 plus annually in higher bills based on these current levels of switching inertia.
Additionally, almost 7 million households (14%) admit they’ve not switched any of their energy, broadband, mobile or insurance providers in over five years, while 2.2 million households (4%) have never switched any of them in their lifetime.
Many people are also frustrated with the switching process, and want providers to make switching simpler. Asked how switching can be improved, 30% want it to be easier to speak to someone in person or on the phone when switching, 17% want their switching application to take less than 15 minutes and 14% want in-contract early exit fees to be capped.
And when it comes to who we trust to recommend a supplier, Brits value their friends’ judgement more highly than expert opinions. More than half (52%), most trust the advice of someone they know to find deals, such as a family member or a neighbour, compared to just under a third who rely on financial advisers (31%) or TV consumer affairs champions (31%).
Commenting on the research findings, Stuart Burnett, Co-CEO at Utility Warehouse, said: “In a tough economic environment, it’s worrying to see so many people missing out on meaningful savings on their household bills. Significant apathy, complicated switching processes and the belief that all suppliers are essentially the same are major barriers to households getting a better deal. We think UK households would be better served by an industry that competes not just on price, but through genuine innovation instead - which in our case is by bundling multiple utilities together under one roof to drive significant savings for our customers.”
The research also analysed the impact that personality plays on household spending and switching behaviour. Respondents to the survey were clustered into four switching personas using a methodology created for UW by Dr Martha Newson, a leading psychologist specialising in human behaviour. When it comes to how our personality relates to our switching behaviour, the research revealed that Brits fall into one of four switching categories:
‘Deal Deliberators’ – people who are naturally inclined to switch but exercise significant caution before selecting a new provider
‘Stuck Switchers’ – people with little inclination to change providers and who are often overly pessimistic about the prospect of securing a better deal
‘Deal Hunters’ – people who proactively seek out deals with a can-do positive mindset
‘Social Switchers’ - people who are generally uninterested in switching but are open to influence from their social network of friends and family
Dr Martha Newson, Newson Consultancy, said: “People have noticeably different attitudes and appetite for switching household services, and their personality plays a role in this behaviour.
“By understanding your switching preferences, you can make it easier to find better deals. For example, Deal Deliberators have an opportunity to leverage their scepticism as an advantage.
“But even for the most cynical of switchers, there are deals to be had and means of finding them, whether you prefer to act on word-of-mouth recommendations, are enticed by an incentive or decide to finally take the plunge on that deal you have had your eye on.”