The ability and willingness of consumers to switch products and services is central to well-functioning markets. Relatively ‘low’ rates of switching in the retail financial services and products sector has long been of concern to policy makers and consumer organisations. Although there is no optimal rate of switching, switching is believed to be inhibited in these markets due to the existence of

related costs or barriers. This is an independent study on switching of financial services and products. More specifically, it assesses the savings forgone by consumers by not switching to more advantageous residential mortgages and payment accounts, provides a comprehensive overview of the legal and commercial barriers to switching in the case of five selected retail financial products, and provides a comprehensive overview of existing (and prospective) measures to increase switching rates across those five financial products. Study evidence was gathered through a mixed-methods approach, comprising both quantitative and qualitative research techniques. The study concludes that there is a considerable number of mortgage and payment account consumers who would benefit from switching, albeit to various degrees, depending on the country and product. At the same time, in some Member States, there is a not insignificant number of consumers who still do not manage to obtain a better deal, despite switching. While the study finds that there are no major legal and commercial barriers to switching of payment accounts, saving accounts, mortgage and home insurance products, switching of residential mortgages is typically more challenging given the conditions required for early repayment or refinancing of mortgages, the plethora of fees that may apply to switch a mortgage, or difficulties related to comparing the various mortgage offers by consumers, among others. The study finds that there is no single measure - whether a well-tailored legal provision or new service/market structure - that could be implemented seamlessly in isolation (or replicated easily across the Member States) to substantially increase the switching rate. However, there seems to be greater scope for incremental improvements to residential mortgages compared to the other products examined here.