Monday, August 11, 2014

Why I have't switched energy companies or bank accounts.

A number of months ago there was a lot of talk about investigating energy companies and their rather predictable response that power cuts are imminent as a result. It's all wrapped up in the issue of prices and the apparent reluctance of consumers to switch suppliers. The same argument comes around about banking and current accounts. apparently we're reluctant to do that too.

In all of this the basic assumption is that somehow the consumer is either apathetic or confused about how simple it is to switch. But there's one question they seem never to ask, Is the consumer happy with what they have? You see I haven't switched either my bank account or my energy supplier for the simple reason that I'm actually quite happy as I am. Perhaps I could save a little money, perhaps the benefits of another a bank would better suit my current needs, but I don't care because I'm happy as I am. I like the service I've had from my bank over the last nearly 40 years so why should I change?

Quite honestly, I get rather annoyed that regulators and financial whizz kids or consumer champions suggest that I'm too apathetic or uninformed to change. It's more likely that I'm a little too cynical, particularly when it comes to energy suppliers. If they could all save me the money they say they can, they'd be paying me to use their gas or electricity!

When it comes to energy supply, I find myself wondering whether privatisation was ever in the interests of the consumer. We were told, back in the day of selling off those assets, that energy prices would drop as competition drove the market. Call me cynical, but I don't remember being told about the need to satisfy the demands of shareholders, or the implications of our energy supply being owned by overseas companies, or anything about what the likely scenario would be when our natural gas and oil resources began to run out. It was imply assumed that a privatised industry would lower consumer prices whilst maintaining investment and research. It didn't.

The old nationalised energy industries might have been somewhat cumbersome, but private industry is rarely any better run. Senior executives still get paid over the odds for the job they do and they don't necessarily seem to do it any better just because there are shareholders to whom they are accountable. I know we can't go backwards, and we can't assume that things would have been better or worse under a nationalised system. So I'm just wondering out loud really about in whose best interest are these private companies run and how will breaking them up even further help refocus them on the needs of the consumer? If privatisation was about consumer choice, how come most of the big companies want you to get both your gas and electricity from them and while you're at it buy your insurance, telephone, internet and banking through them at the same time.

And the banks, well their reputation couldn't get any more tarnished. Fixing interest rates, mis-selling insurance, the list goes on. I suspect that the debates and arguments about current accounts will go and on. They will continue to threaten to charge for account services, but I guess things will pretty much stay the same. Stay in credit and it will be free. This is possibly unique to the UK. Friends from America certainly find it amazing that we generally are able to access free banking on private current accounts.

I have checked the comparison websites, and the savings or benefits are marginal at best insignificant most of the time. So I haven't changed and I probably won't. If they have been for you then that's great.

What I really don't like is someone on the TV or radio telling me that because I haven't switched that I'm somehow responsible for the low levels of switching and that this in turn is somehow keeping prices up. It would be nice to hear someone suggest that companies and banks failing to recognise and reward loyalty is the reason they maintain higher prices and not because consumers don't switch supplier every year or so.

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