Brokers dismiss A&L research on Brits’ financial habits

Brokers have held up the red card to research from Alliance & Leicester that claims Britons are more prone to stick to their lender rather than shop around for a better deal.

A&L’s research shows that 85% of borrowers tend to stick to their financial providers, spurring the bank to make the analogy that borrowers are more likely to change their local pub than change their financial provider.

By the same token, 85% tend to vary what they eat when they dine out and 74% sit in different areas when travelling to work on public transport.

Stephen Leonard, director of mortgages at A&L, says: “Our research suggests that while people are adventurous in their day-to-day lives, it is interesting that this doesn’t follow through to their finances. This could mean they are losing out on the savings that could be made by shopping around for the best deals.

“It’s a good idea for people to consider being more flexible by reviewing their finances regularly rather than getting stuck in a financial rut.”

He adds: “It is important that consumers consider the advantages of flexible financial products as they could also be missing out on additional benefits such as payment holidays and overpayments on their mortgage which can greatly aid and enhance their financial planning.”

The research also found that 27% like their payments to be fixed every month and 36% are not even aware that financial products can be flexible.

But James Carter, independent financial adviser at Virtue Financial, says: “I am surprised at this research and am interested to find out the sample of people they surveyed. My clients are mainly young Londoners and pretty savvy when it comes to switching credit cards and remortgaging.

“However, I’d say there is a generation gap as younger people are a lot more likely to switch than older people, who tend to be more conservative.”

Jonathan Burridge, managing director at Quantum Mortgage Brokers, says: “Reluctance to change financial providers varies depending on the product.

“For example, it’s extremely unlikely that most people will move their personal banking. However, the current mortgage market has grown largely because of people remortgaging to a new financial provider.”