Press Release: Consumer Panel research makes case for automatic upgrades


The Financial Services Consumer Panel has today published new research which looks at the potential detriment for consumers of being trapped in poorly performing financial services products. The research shows that the costs of remaining in such products can represent a notable proportion of a consumers’ annual income.

As a result, in a position paper also published today, the Panel has asked the FCA to consider the merits of introducing a new automatic-upgrade rule. This would either require a firm to automatically upgrade its customers into its best available product or offer them a choice of better quality and better value products within the firm’s portfolio which suit their needs.

The recent super-complaint from Citizens Advice raised concerns about long term customers paying more for goods and services, which it referred to as ‘the loyalty penalty’. The Panel’s research investigated this further.

Conducted by Europe Economics, the research used the FCA’s ‘Financial Lives’ data to identify the products which were held by the ‘average’ consumer in several different groups. The 8 products examined were current accounts; cash ISAs; credit cards; mortgages; investment products; pensions; home insurance and income protection. The research found that some consumers could be incurring loyalty penalties over 5% of their annual income, and it is not impossible to imagine that there are some consumers for whom these costs are as high as 10% of their income.

Panel Chair, Wanda Goldwag said:

The research demonstrates the detriment for consumers of remaining in poorly performing products and the need to ensure that all consumers are treated fairly. Loyal customers are often those who are too busy to search for and switch to better products, those who do not switch due to behavioural biases, those trapped with their existing provider or those who are not aware that better alternatives exist. Consumers should not be penalised for this loyalty. An automatic-upgrade rule would level the playing field.”




Sharon Chapman (Consumer Panel): 020 7066 9346




  1. The Consumer Panel is a statutory body under the Financial Services Act 2012.  The Financial Services Authority originally established it in December 1998. The Panel advises the FCA on the interests and concerns of consumers.  The Panel is independent. Its views do not represent those of the FCA.  
  2. The emphasis of the Panel's work is on activities that are regulated by the FCA, although it may also look at the impact on consumers of activities outside but related to the FCA's remit. More information about the Panel's work is available on its website: or via its Twitter account.

Wanda Goldwag (Chair)

Dominic Lindley

Caroline Barr

Francis McGee

Mark Chidley

Pamela Meadows

Sharon Collard

Keith Richards

Teresa Fritz

Angela Roberts

Jennifer Genevieve

Jeff Salway

Doug Taylor

Faith Reynolds