Financial institutions should offer simple savings products, research suggests

Savers and investors prefer easier to manage financial products that don’t have special introductory offers which they regard as a device to hook people in.

And the majority of savers confess they don’t move accounts when introductory bonuses expire, the research by Aldermore reveals.

The research, which includes responses from more than 800 savers located throughout the country, confirms that 62% of savers prefer products without bonuses, with 78% saying they find them very frustrating.

Some 93% of savers said they accept the need to move accounts when introductory bonuses expire and, although 84% said they make a note of key dates, only 54% do actually move their account when the bonus period ends. Some 13% admitted that it can take more than three months to move their account and 7.2% confessed they never transfer to a more competitive deal at all.
 
‘Saving, it would appear, is like going on a diet. People start with the best intentions but many fail to fulfil them. Savers clearly understand that financial institutions use bonuses to hook them in, but a surprisingly large number are missing out on valuable income by not switching when bonus deals end,’ said Simon Healy, head of savings at Aldermore.

‘Our research confirms that savers want banks and building societies to get back to basic and make their products straightforward and easy to manage. Four fifths of savers prefer dealing with British banks and two thirds say they want products and services to be kept simple. It’s up to financial institutions to respond and make-up with their saving customers,’ he added.
 
Aldermore, a new name in British Banking, launched its savings service in 2009 with a guarantee to provide UK savers with a combination of consistently competitive rates, simple products and excellent service.

Aldermore has recently launched a savings account paying a variable rate of 3.10% AER, which is free from introductory bonuses and is guaranteed to remain at least 2% above Bank Base Rate until 01 March 2013. This means that, unlike accounts offering introductory bonuses, savers do not need to worry about being paid a derisory rate at a future date.