New KPMG research shows that individuals aged 65 and over are the least likely to switch banks. With rising life expectancy in the UK and low fertility rates, individuals in this cohort will account for a growing share of the banking market in the future.
- Over a third (39%) of individuals aged 65 and over say they plan to never switch banks – the highest percentage of any age group, according to new research from KPMG UK*.
- This contrasts with just 13% of 25–34-year-olds who stated they plan to never switch banks, the lowest percentage of any age category. Almost a quarter (24%) of UK adults plan to never switch bank accounts.
- Overall, just 17% of Brits stated they had switched bank accounts in the last year. However, switching activity varies considerable by age group; almost half (45%) of 18–24-year-olds surveyed stated that they had switched banks in the last year compared with just 4% of those aged 65 and older.
- Among the top reasons individuals gave for why they last switched banks; 27% switched due to a cash incentive, 25% switched due to better customer service and 21% due to more competitive interest rates. Better customer service was the top reasons for why individuals aged 18-24 (28%), 25-34 (32%) and 65 and over (24%) last switched banks.
- Newer entrants to the UK banking market whose apps tend to offer more features than the larger incumbents are set to continue to benefit from the accelerated shift towards online banking. However, many older individuals are reluctant to turn away from traditional high street banks, almost half (49%) of individuals aged 65 and over stated that nothing would make them consider moving their main source of income to a non-high street bank account.
Peter Rothwell, Partner and head of banking at KPMG UK, said:
“Older consumers appear much more reluctant to switch banks compared to their younger peers. This raises the question – are banks doing enough to entice the over 65’s?
“A combination of rising life expectancy and low fertility rates means that those aged 65 and over are set to account for a growing share of the consumer market. But arguably banks - particularly the new entrants – have overlooked this age group to focus on wooing the younger generations.
“This significant generational shift should not be overlooked by lenders. The growing proportion of older consumers now represents a big opportunity, but also a challenge, for the banks. To entice this older demographic when it comes to switching, lenders must focus on raising awareness of the ease and the perks of the switching process, particularly when it comes to money saving features that could help address cost of living challenges.”
