Moneysupermarket: savers 'aren't bothering' to switch accounts

Returns on savings accounts have become so minimal that consumers are not bothering to shop around for the best rates, according to the chief executive of Britain’s biggest price comparison website.

Moneysupermarket.com’s Peter Plumb said the company was now selling half as many easy access savings accounts as two years ago, with interest rates now at an average of around 1.5pc compared to 3pc in 2012.

On Tuesday, the price comparison website said revenues from directing users to switch bank accounts, for which it earns a fee, fell 30pc in 2013.

This came despite more visitors to Moneysupermarket overall and a 10pc rise in the group’s total revenues, thanks to more people using it to switch energy providers and comparing travel providers.

Financial products, once the group’s biggest division, have represented a shrinking part of the group’s revenues since the launch of the Government’s Funding for Lending Scheme and the introduction of record low interest rates, which have made banks less reliant on savers’ deposits.

“People are searching online and the attitude is ‘why bother’ when rates are so low,” said Mr Plumb. “We still get millions of visitors looking at savings rates, but at 3pc we sold about 400,000 [easy access savings] accounts, and at 1.5pc we sell half that.”

He said the environment is likely to improve for savers in the second half of the year, as the housing market revival means banks have to attract more consumers to save in order to sell mortgages.

Housing loans have been subsidised by the Government’s Funding for Lending Scheme (FLS) in the last two years, but Bank of England Governor Mark Carney scrapped the mortgage aspect of the FLS from the beginning of this year.

“Funding for lending scheme helped fill the balance sheets [of banks] and it will take time for that to trickle away,” said Mr Plumb.

In 2013, Moneysupermarket’s profits rose 37pc to £43m. Revenues at the company’s travel division rose 35pc and those at its home utilities unit were up 93pc.

Mr Plumb said 350,000 households had used Moneysupermarket to switch energy provider, with the “Big Six” challenger Ovo Energy the most popular company to switch to.

The company, which is 29.5pc owned by its founder Simon Nixon, upped its final dividend by 30pc.