Many of the best relationships in life are based on loyalty. And it’s not just with our personal relationships; lots of us are loyal to brands as well. But does loyalty really pay?
Some of us always buy our coffee from the same shop, or stick with the same bank account for a lifetime. But is this a wise move? Should we instead be more mercenary when it comes to things like getting the best return on your savings or getting the best deal on your energy tariff?
Earlier this week the Financial Conduct Authority published the results of its study into the cash savings market. In short, it found that loyal savers missed out on the best deals. Moreover, although a small number regularly shop around, most people don’t.
This means that banks are able take advantage of consumer inertia by paying low rates on older savings accounts. In fact, we estimate that UK savers are missing out on £4.3bn by leaving their money in poor value savings accounts.
Advantages to loyalty
Of course, there are good reasons why you may want to stick with the same company, even if they aren’t the cheapest or most competitive. You may just really like their customer service, for example.
But is it worth paying a premium to do so? Many companies seem to reserve their best deals for new customers, whereas longer standing customers are charged a higher price. It would be much easier if loyalty was rewarded, but these days it seems like you have to regularly shop around to make sure you’re not getting ripped off.
What do you think? Does it pay to stick with the same company or should people regularly review their options to make sure they’re getting the best deal? Your views will help me with an upcoming feature in Which? magazine.