Should switch, don’t switch written by The Social Market Foundation, in partnership with examines why consumers display more engagement in some markets, such as the car insurance market; where 32% of consumers report having switched in the previous 12 months as policies expire; compared with the current account market where just 7% report switching. It identifies key behavioural biases that affect the decision making of consumers, namely:

• Too much information – research shows consumers make better decisions, and are happier with them, when confronted with less information. Some consumers may be put off entirely by too much information.

• Framing - consumers are sensitive to wording around price and value, such as “half price”, “months free” or limited time deals.

• Habits – behaviour often becomes habitual, which becomes a barrier to making well-reasoned decisions.

• Biased beliefs and inconsistent preferences – people make decisions based on poor predictions of future behaviour.

Learning lessons from these markets where consumers are most active, combined with insights from behavioural economics and social psychology, Should switch, don’t switch provides a detailed understanding of how government and regulators can help overcome consumer inertia and enable households to save money.

SMF make a number of recommendations, all of which can be viewed in the full report, downloadable here.