On a quiet Wednesday morning at a bank branch in Hertfordshire, an elderly woman with hearing difficulties is speaking loudly to the teller. “Can you tell me why my travel insurance has gone up to £149 a year? Last year it was much less. Why has it changed?” As the staff member explains this was an introductory offer that did not continue past the first renewal date, a couple in their 40s on the other side of the branch are navigating their own introductory deal with ease. They are showing ID to secure a current account switch they organised online, which will net them several hundred pounds in the next year in interest and new-joiners’ rewards. Welcome to Britain’s twin-track services economy. While many retailers reward us for loyalty, a swath of consumer industries, from banking to energy to insurance, penalise us for not regularly switching to new accounts, tariffs or policies. Regulators have seized on switching as the answer to improving competition, but there is a growing political backlash against a system which rewards a few, motivated customers. The cheaper deals they are able to obtain are, in effect, paid for by the rump of loyal customers who are penalised for not being willing or able to switch. Podcast Claer Barrett and guests discuss “the switcher’s charter”, as they look at how to get the best deals on your mortgage, bills or bank account In her speech last week at the Conservative party conference, Theresa May, the prime minister, said the government would not hold back from intervening in “dysfunctional” markets that were failing to offer proper consumer choice. “Where companies are exploiting the failures of the market in which they operate, where consumer choice is inhibited by deliberately complex pricing structures, we must set the market right,” she said, adding: “It’s just not right that two-thirds of energy customers are stuck on the most expensive tariffs.” New hints and tips Share 10 articles a month with non-subscribers, who can read them – absolutely free More tips There is plenty of evidence that consumers are reluctant to switch. We are more likely to get divorced than change bank account, so is it any surprise that companies are working idle loyalty into their pricing models? “There is price discrimination,” says Dominic Lindley, director of policy at think-tank New City Agenda. “Companies do what is commonly referred to in banking as ‘gouging’ the back book of people who don’t use the information that is out there, or find it difficult to understand, to pay for those who can.” A family could potentially save nearly £3,000 a year by grabbing all the best deals around, price comparison site Gocompare estimates, assuming they have a £160,000 mortgage on their lender’s standard variable rate, are paying a default utility tariff and using the least generous credit cards and bank accounts. But achieving these savings will require digital prowess, using online comparison tools and haranguing rival suppliers — not to mention hours of research. “Being a consumer is not a job,” says Caroline Barr, a member of the Financial Services Consumer Panel, which advises the Financial Conduct Authority on consumer issues. “I know when I have finished work and put the kids to bed, I don’t want to spend hours researching current accounts.” Unfortunately, even consumers who manage to switch deals once may forget to do so again — and find they revert to a much more expensive “variable rate”. This model is used across the industry on products including mortgages, energy bills and broadband contracts, meaning consumers who want the best rates must engage in an endless cycle of switching to keep up. Some regulators think that raising awareness of poor rates will encourage more people to switch — for example, energy regulator Ofgem wants suppliers to put prompts on customers’ bills and the Competition and Markets Authority wants consumers to share their data digitally so the best deals can find them. While the political mood is changing, for now savvy FT Money readers should switch. We set out what your key priorities should be below, but also urge readers to investigate what contracts and tariffs elderly relatives are signed up to — our research shows that they are the most vulnerable to egregious charges. © iStock Mortgages Your mortgage should come top of your “switch and save” priority list, as low interest rates mean you could potentially save thousands. An estimated 3m UK borrowers have rolled off a fixed-rate deal on to their lender’s standard variable rate (SVR) paying an average interest rate of 4.6 per cent, according to Moneyfacts, although rates on some new loans are now below 1 per cent. The more equity you have, the better the rate you will probably get — though you should watch out for high arrangement fees. However, older customers are more likely to find themselves “mortgage prisoners” stuck on expensive SVR loans, as tougher lending rules make it harder for them to switch. Last month, the FCA said it was looking at whether there are “barriers to innovation in mortgage products that stop them genuinely meeting the changing needs of older people at every stage of life”. A big problem affecting older borrowers is interest-only loans that are nearing the end of their term and have no realistic chance of being repaid. Since 2012, lenders have managed to halve the number of these loans on their books to 1.7m, with a further 0.5m altered to include some repayment element. Problems can occur when an interest-only borrower who needs to extend the length of a mortgage has a lower income than when they originally took out the loan. In one case, a charity chief executive was refused her request to transfer from a SVR interest-only mortgage to a cheap fixed-rate loan because the length of the mortgage term would extend beyond her retirement. The Council of Mortgage Lenders said that stories of older people being denied cheaper loans were rarely simple. “An awful lot