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Banking loyalty 'costs £2,714 a year'

By Sarah Engle, Wed 30 Jun 2010 - Published in Loans

New research has claimed that staying loyal to a bank or building society could cost savers more than £2,700 a year.

A study by price comparison website moneysupermarket.com showed that consumers who shop around for the best deal for financial products can pay up to £2,714 a year less than those who obtain all their deals from one provider.

The research looked at the relative costs and earnings of products such as mortgages, cash Isas, easy access banking accounts, credit cards, personal loans and current accounts.

It discovered that picking the best-in-market deal for each product costs consumers £5,530 a year in interest and other charges, while remaining with the overall most expensive provider - Halifax - costs £8,244.

Kevin Mountford, head of banking at moneysupermarket.com, commented: "By switching to the best deals in the market, you could potentially give yourself a large pay rise for just a few hours work, which could be used to boost your savings or pay down your debts quicker."

This week, ARK Financial Planning director Phil Perry claimed that people have started to take a more active approach to financial management since the recession.