Consumer insight report

Consumer insight report
A Scottish consumer snapshot 2016
Introduction to Which?
Which? is the largest consumer organisation in the UK, with more than
1.5 million members and supporters. We exist to make individuals as powerful
as the organisations they have to deal with in their daily lives. We achieve change
by providing information and impartial advice that puts people in control, by
providing services and products that put consumers’ needs first to bring them
better value and through running campaigns that make people’s lives fairer,
simpler and safer.
We operate as a group social enterprise whose growing work on behalf of all
consumers is funded solely by our commercial ventures. We are completely
independent and receive no government money, donations from the public,
or any other fundraising income.
Which? in Scotland
Which? has been active in Scotland since 1999, working on both UK and uniquely Scottish
consumer issues from our Edinburgh office. We have campaigned on a wide range of issues
that matter to consumers, including health, housing, food and getting justice for consumers
who have experienced poor quality goods and services. We successfully campaigned to
help improve access to NHS dentistry, for the introduction of Home Reports to provide better
information to Scottish homebuyers, and drove forward the first national food hygiene scheme
to inform the public about food safety in schools, restaurants and takeaways. We also pursued
the first super-complaint in Scotland, to open up competition in legal services and drive down
costs for consumers.
Scottish context
Since May 2016, the Scottish Government has had new powers over consumer advocacy
and advice. It has committed to helping ensure better outcomes for Scottish consumers
when they engage in public or private markets, as well as setting up a new consumer body,
Consumer Scotland. At Which? we also want to ensure the best outcomes for consumers
in Scotland, by ensuring the Scottish Government uses its powers and influence to shape
a pro-consumer landscape.
Which? Scotland – Scottish consumer snapshot 2016
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Executive Summary
In the last year, Holyrood has gained new powers
in a range of new areas. This includes powers that
could make a difference to every Scot in a key area
of their everyday lives – the products they buy and
the services they use. As the Scottish Government
starts to consider how it will use its new powers
for consumer advocacy and advice, Which? has
conducted research to gain a better understanding
of the issues that Scottish consumers face.
We’ve looked at how they behave when they interact
with certain markets, the problems they experience,
and the geographical and social factors that particularly
affect them. We have looked at their levels of financial
distress, top worries, trust in different industries, and their
experiences of essential and public service markets.
We want these findings to help the Government to
shape their future plans. In particular we want to see
a dynamic, well-resourced new consumer champion
that can press for changes that really address the
consumer issues that affect the lives of people in Scotland.
We know that Scottish residents often experience similar
problems to people in the rest of the UK, whether its
challenges with their energy bills, poor customer service
in their banks or slow broadband speeds. Problems
with switching providers and a lack of trust in essential
markets is also a common theme.
But we also know that people living in Scotland
experience problems unique to their geography or
financial situation, for example, with higher delivery
charges, or in the energy market where there are larger
numbers off the gas grid and more households on prepayment meters which makes switching tariff or provider
even harder. Or in the banking or telecoms sector, where
many people simply do not have access to anything
other than one bank branch or one broadband provider.
Which? Scotland – Scottish consumer snapshot 2016
Our research shows that levels of switching in many
sectors is low amongst Scottish consumers, and that
a surprising number of people took no action when
they had a problem with a service. In public service
markets, for example, 39% took no action when they
had a problem, with many feeling nothing would be
done if they did.
Scottish consumers need an advocate, and they
need better advice to help empower them make better
decisions. This is why there is a great opportunity with
these new powers and a new consumer landscape
in Scotland to ensure that consumers get the best
outcomes possible.
The SNP’s 2016 manifesto grasped this
fact, and committed to a body that
‘will be given the powers to carry out
research and representation and will
use evidence, expertise and knowledge
to stand up for consumers.’ The top
concern for Scottish people was about
public spending cuts, with worries
about interest rates on savings, and
daily essentials such as fuel and energy
prices following closely behind. People in
Scotland were also concerned about the
interest rates on their savings and the
value of their pensions.
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Profile: The Scottish consumer
There are approximately 5.3 million people
living in Scotland. The large majority of these
are consumers – interacting with markets,
either public or private, on a regular basis.
The Scottish Government defines a consumer as
“anyone who buys goods or digital content, or uses
goods or services either in the private or public sector,
now or in the future.” We agree with this definition.
We know that, like consumers across the UK, Scottish
people typically experience a wide range of issues
and concerns within private and public markets. Many
also are not aware of their rights as consumers and
who to turn to for help. However, there are also distinct
economic, social and geographical circumstances
which mean that the typical Scottish consumer may
engage in a market in a different way than those
elsewhere in the UK.
Issues such as geographical location, social deprivation
or provision of infrastructure and information to be able
to make good consumer decisions all affect the way
Scottish people interact in a market. Similarly, decisions
made by businesses, regulators or policy-makers, either
in Westminster or Holyrood that impact upon a market
may affect Scottish consumers in a different way.
Which? Scotland – Scottish consumer snapshot 2016
Methodology
Which? commissioned YouGov Plc to conduct an online
survey of 1007 adult residents of Scotland (18+) between
18th and 23rd August 2016 to establish a broader picture
of the Scottish consumer for this report. Data were
weighted to be demographically representative.
To measure Financial Distress, we used data from
Which?’s Consumer Insight Tracker, a regular poll for
Which? of UK adults. As part of the Tracker, we surveyed
12,008 people between January and December 2015
and asked about their financial experiences. With this
data, we are able to provide a uniquely detailed picture
of Scottish consumers’ behaviour and sentiment in
the current economic climate. Estimates of sentiment
were calculated for each 2011 Output Area Classification
group, extrapolated down to individual output areas,
and averages calculated for each constituency
and region. For a unique view of Scottish
constituencies, see consumerinsight.which.co.uk/
scotland-constituency.
To measure consumer worry and trust, we looked
at the Scottish data from our September 2016 tracker,
a poll of approx. 2000 UK adults.
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Financial distress
Our data shows that many people in Scotland
are still feeling the pinch, and our evidence points
to particular problems in urban areas, particularly
in Glasgow and, to a lesser extent, Edinburgh.
Using data from Which?’s consumer insight tracker
polling, we created a Financial Distress Index, which
estimates the extent to which households in an area are
experiencing financial difficulty relative to all other areas.
The index is made up of five levels of financial distress:
Our Financial Distress model shows the 10 most
financially distressed constituencies in Scotland are:
The Financial Distress model shows the 10 least
distressed constituencies in Scotland are:
• Cutting back only
• Using savings and cutting back
•
Cutting back and borrowing from
friends/family/creditors
• Risky borrowing
• Defaulting on bills/housing
4
2
1
1
4
8
9
2
6
3
5
7
5
3
8
10
9
6
7
10
1Glasgow Maryhill
and Springburn
2 Glasgow Southside
3 Glasgow Provan
4 Glasgow Annielsand
5 Glasgow Cathcart
6 Glasgow Pollok
7Edinburgh Northern
and Leith
8 Glasgow Kelvin
9 Glasgow Shettleston
10Greenock and Inverclyde
Which? Scotland – Scottish consumer snapshot 2016
1 Na h-Eileanan an Iar
2Orkney
3 Aberdeenshire West
4Shetland
5 Aberdeenshire East
6Eastwood
7 Skye, Lochaber and Badenoch
8 Caithness, Sutherland and Ross
9Perthshire South
and Kinross-shire
10Dumfriesshire
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Top consumer worries
Our data shows that people in Scotland
demonstrated a greater level of concern about
consumer issues than those in the rest of the UK.
The top concern for Scottish people was about
public spending cuts, with worries about daily
essentials such as fuel and energy prices
following closely behind. People in Scotland
were also concerned about the interest rates
on their savings and the value of their pensions.
The Scottish rankings are similar to those in the rest
of the UK, but some differences do arise, for example
energy and fuel prices rank higher in Scotland than
the rest of the UK. Brexit also appears to be of higher
consumer concern in Scotland than in the rest of the UK.
Scotland
Rest of UK (excluding Scotland)
Using Which?’s September 2016 Consumer Insight
Tracker data, we gathered information about what
worries Scottish consumers. The percentage in brackets
shows the proportion of people asked who were worried
about a particular issue.
Public spending cuts (74%)
Public spending cuts (62%)
Interest rates on savings (67%)
Interest rates on savings (59%)
Energy prices (67%)
Energy prices (56%)
Fuel prices (64%)
Pension values (56%)
Pension values (61%)
The quality of public services (55%)
Future tax levels (60%)
Fuel prices (55%)
Quality of public services (60%)
Future tax levels (51%)
Food prices (59%)
Food prices (50%)
Brexit (52%)
Levels of household savings
and investments (48%)
Mortgage rates (47%)
The exchange rate
of the pound (44%)
Level of household savings
and investments (45%)
Mortgage rates (43%)
The exchange rate
of the pound (40%)
Levels of household
debt (39%)
Which? Scotland – Scottish consumer snapshot 2016
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Levels of trust in industries
Our data shows that the water industry (home
supply) rates the most trusted sector among
Scottish consumers, followed by the food/grocery
sector and technology appliances, two very
different industries altogether. At the bottom of
the table, we found that car dealers in Scotland
are highly mistrusted, together with energy
companies and those in the financial sector.
It is important that consumers trust organisations
and industries to do the best for their customers.
A healthy consumer landscape relies on informed,
empowered consumers who trust the organisations
and businesses they deal with to treat them correctly.
Low levels of trust erode confidence, affect the
economy, and reflect badly on business.
Using Which?’s Consumer Insight Tracker polling
data for September 2016, we gathered information
about their level of trust Scots have in certain industries
or sectors. The percentage shows the proportion
of people who trust a certain industry.
The industry sector / organisations most trusted in Scotland are:
68
%
62%
59%
Water
Food/grocery sector
and
Technology appliances
Domestic
appliances
The industry sector / organisations most distrusted in Scotland are:
Car dealers
Long-term financial products
Energy companies and Day to day banking
Which? Scotland – Scottish consumer snapshot 2016
59%
38%
36%
36
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Experiences of essential markets – telecoms, energy, banking
In our survey, we asked people what products they used in markets considered ‘essential’, such
as home internet, energy and banking. We also asked about their attitudes to switching, problems
they had experienced in these sectors, and how they sought to resolve them.
Our data shows that levels of switching is low amongst Scottish consumers across the three
industries we looked at. The kind of problems Scottish consumers face often relate to their
geography (e.g. poor broadband connections), to their rurality (e.g. closure of their local bank branch),
or even basic consumer transaction problems (e.g. poor customer service in banking or energy).
In general, most people who experienced problems complained over the telephone at the time,
but a large number of people took no action at all when they experienced a problem, sensing
that no action would be taken as a result of a complaint.
Home internet connection
Gas and electricity
Main current account
Proportion who
have switched in
last five years
33%
23%
18%
(Of those with an internet
connection at home)
(Of those with gas and electricity)
(Of those with a current account,
answering about their main one)
Proportion who have
NOT switched in the
last five years
62%
68%
79%
(Of those with an internet connection
at home)
(Of those with gas and electricity)
(Of those with a current account,
answering about their main one)
Proportion who
have had problems
in last two years
44%
8%
5%
(Of those with an internet
connection at home and with their
current provider)
(Of those with gas and electricity
as their main supplier)
(Of those with a current account,
answering about their main one)
Proportion who have
NOT had problems
in last two years
48%
80%
86%
(Of those with an internet
connection at home and with their
current provider)
(Of those with gas and electricity
as their main supplier)
(Of those with a current account,
answering about their main one)
Top three problems
Intermittent connection (27%) Billing (47%)
Slow speed (24%)
Unable to connect (22%)
(Of those who have an internet
connection at home, an issue with
any provider)
Poor customer service
(33%)
Poor customer
service (24%)
Meter problems (18%)
Money taken
fraudulently (14%)
(Of those who experienced an
issue with their current provider)
Closure of local branch
(13%)
(Of those who ever experienced
a problem with their main current
account provider)
Top action taken
among those who
had a problem
Complained over phone
at time (46%)
Complained over phone at
time (55%)
(The most recent problem)
(The most recent problem)
Complained in person
(20%), or called the
provider’s helpline (20%)
(Of those who experienced
a problem)
Proportion who took
no action when they
had a problem
39%
Top reason for no
action among those
Not worth the effort (31%)
Which? Scotland – Scottish consumer snapshot 2016
21%
32%
Not worth the effort (28%)
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Home internet
Energy
Increasingly, many consumers are turning to the internet
to buy goods, or use public services. Whether it’s paying
bills or buying groceries online, applying for a school
place or complaining online about poor service, the
internet is increasingly being seen as an essential service
for many. According to Ofcom, 65% of internet users in
Scotland claimed to shop online for goods, services,
tickets, etc, a similar proportion as in the rest of the UK.
One of life’s essentials, gas and electricity provision is a
service most consumers rely on. The recent CMA energy
market investigation showed that many people are on
the wrong tariff, or not able to switch. The CMA indicated
that this problem was more pronounced in Scotland.
Which?’s Fair Energy Prices campaign aims to fix the
broken energy market, to make switching easier and get
companies to do more to protect the most vulnerable
stuck on standard tariffs.
•
89% of those we surveyed had an internet
connection at home.
• 42% had standard broadband through a phone line.
•
93% of those we surveyed have electricity supply
in their homes, and 76% have gas supply.
• 32% had fibre optic broadband.
•
4% use oil.
• 11% had cable connection.
•
The top suppliers amongst respondents are
Scottish Power (25%), British/Scottish Gas (22%)
and SSE/Scottish Hydro (17%).
• 3% satellite.
• 1% dial-up.
A majority have not switched internet providers
in the last 5 years.
•
85% of those with both electricity and gas use the
same supplier, and the most common tariff on dual
fuel was fixed term (64%).
•
62% of people we surveyed had not changed their
internet providers in the last five years,
compared to 33% who had.
68% of people have not switched supplier in the last
five years. The top reason for not switching was that
there wasn’t enough difference between suppliers.
44% of people have had problems in the last
two years, and the most common one relates
to connections
•
68% have not switched gas and electricity supplier
in the last five years.
•
44% have had a problem with their home internet
connection in the last two years, and 48% did not.
•
73% have never had a problem with their connection.
•
The most common problems with home internet are
related to intermittent connection (27%), slow speed
(24%) or unable to connect for a few minutes, but no
longer than a day (22%).
Almost half of those who experienced a problem
complained at the time, but many took no action at
all. Many of them felt it wasn’t worth the effort of
complaining.
Of those who had a had a problem with their home
internet provider.
•
Nearly half (46%) complained over the phone
at the time.
•
Four in 10 (39%) didn’t take any action to resolve
the problem.
•
The top three reasons that people give for why they
didn’t complain to their internet provider were they did
not feel it would be worth it (31%), the problem rectified
itself before they got around to contacting them (27%),
and it didn’t bother them enough to complain (22%).
Which? Scotland – Scottish consumer snapshot 2016
•
In the last five years, 23% considered switching
supplier and did.
•
Of those who had switched supplier, the top three
things that prompted them into switching were:
becoming aware of cheaper deals (47%), a fixed
tariff coming to an end (26%), and a tariff price
increase (20%) .
•
The top three reason people didn’t switch supplier
were: that there wasn’t enough difference between
suppliers to make it worthwhile (23%), thinking they
were on the best tariff already (19%), and that the
amount saved wouldn’t be enough (18%).
The majority don’t have any problems with their
energy supplier, but those that did, have experienced
billing problems or poor customer service.
•
80% of those who have gas and electricity did not
experience problems in the last two years, and 8% did
experience a problem.
•
Of those who had experienced a problem four in 10
(43%) people had a problem in the last 12 months.
•
The top three problems experienced with an energy
supplier were: billing problems (47%), poor customer
service (33%), and problems with meters (18%).
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Most people who experienced a problem
complained at the time, but a fifth took no
action at all.
A large majority have never had any problems
with their bank, but those that have experienced
poor customer service or were victims of fraud.
•
The top actions people took when they had
experienced their most recent problem were:
complaining over the phone at the time (55%),
using an online form to complain (21%), and
writing a letter to complain (20%).
•
Of those who hold a current account, only 5% have
had problems in the last two years.
•
Two in 10 (21%) didn’t do anything in particular.
Banking
As we discovered in our consumer trust survey,
banking does not rate highly as an industry that Scottish
consumers trust. Which?’s Better Banks campaign aims
to shake up the banking system to ensure banks treat
their customers more fairly and improve their customer
service. The CMA’s recent banking remedies laid out
plans to ensure banks do more to help people manage
their money better, and help people switch accounts
more easily.
The top four banks people hold their main current
accounts with are Bank of Scotland (26%), Lloyds TSB
(10%), Santander (9%), and Clydesdale Bank (8%).
•
73% had never experienced a problem.
•
Of those who had experienced a problem poor
customer service was the most common (24%).
•
One in seven (14%) had money taken fraudulently
from their account and one in seven (13%) experienced
closure of a local branch.
Two in ten complained there and then about their
most recent problem, but three in ten took no action
to complain when they experienced a problem.
•
20% complained in person at the time and 20%
called the helpline to complain.
•
32% didn’t do anything in particular to complain
when they experienced a problem.
•
The top reasons that people didn’t do anything when
they experienced their most recent problem were they
did not feel it would be worth the effort (28%), it didn’t
bother them enough to complain (25%), and they did
not feel that anything would be done (17%)
Four in 10 Scots have never switched current
account providers, and 38% had done so, but
over 5 years ago.
• 41% had never switched current account providers
•
18% have switched their main current account in the
last five years and 79% have not done so in the last
five years.
• 38% had done so, but over five years ago.
•
Of those who had considered but hadn’t switched
current account providers in the last two years the top
reasons were: There wasn’t an account competitive
to make them switch (30%), it seemed difficult/
complicated to switch (25%), and they found they
were on the best current account for them (18%).
•
Of those who had not switched or considered
switching current account providers in the last two
years the top reasons were: They thought they were
on the best current account for them (36%), they didn’t
think there would be an account competitive enough to
switch (23%), and it seemed too difficult to switch (16%).
Which? Scotland – Scottish consumer snapshot 2016
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Experiences of public service markets
Many people do not see themselves as ‘consumers’ of public services, but they should – the Scottish
Government defines ‘consumers’ as those who buy goods or use public services. At the heart of all
public services is the need to deliver in the patients’ or users’ interest. Scottish public services have
undergone significant reform, with the integration of Health and Social Care being the most recent.
And with an ageing population and budgetary pressures on many services, there are many demands
on the system, including the need to be more responsive to the users of those services.
In our survey, we asked people what services they used most, whether they had experienced problems
in these sectors and whether and how they sought to resolve them.
Proportion who
have had problems
in last two years
10%
Seven in 10 have never experienced a problem,
but for those who had, most were about poor
standards or waiting times.
(Of those who have used
a public service)
•
67% of people have never experienced a problem
with public services.
Proportion who
have NOT had
problems in last
two years
79%
Top three problems
Poor standard (44%)
•
The top problems experienced by those who had
had a problem are: the service not being of a good
standard (44%), they were waiting a long time for
the service (20%), and they were unable to get the
service they needed (15%).
Public services
(Of those who have used
a public service)
Waiting time (20%)
Unavailability of service (15%)
(Of those who experienced
a problem)
Top action taken as
a result of problem
Complained in person
at time (18%)
Proportion who
took no action when
they had a problem
39%
Top reason for
no action
Did not feel anything would
be done (40%)
A significant number of Scots didn’t complain
about a problem with a public service. The
majority of them felt nothing would be done.
•
Four in 10 (39%) people didn’t do anything in
particular when they experienced a problem with
a public service.
•
Two in 10 (18%) complained in person then and there.
•
The top reasons people didn’t do anything when
they experienced a problem were: they did not feel
anything would be done (40%), they did not feel it
would be worth the effort (22%), and it didn’t bother
them enough to complain (21%).
The most used public services are GPs (92%)
and dentists (89%). The least used are home/social
care (4%) and care homes (3%).
Which? Scotland – Scottish consumer snapshot 2016
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Policy recommendations
Which? welcomes the SNP’s 2016 manifesto
commitment ‘to support consumer rights –
once consumer advice and advocacy powers
are devolved to the Scottish Parliament – we will
develop a Consumer and Competition Strategy
and legislate to create a unified consumer body.
This body will be given the powers to carry out
research and representation and will use
evidence, expertise and knowledge to stand
up for consumers.’
Shaping the new Scottish consumer landscape will
be a significant project for the Scottish Government
in the course of this Parliament.
The objective of a new Scottish consumer
strategy should be to enable:
Empowered, confident consumers: people are better
informed of their rights, able to secure prompt redress
(with those less able to engage in markets receiving
targeted and appropriate support) and readily able to
access top quality, independent, trustworthy sources of
information including aids to comparison and switching
that support firms that treat their customers fairly.
Companies that engage positively with their
customers: firms take account of customers’ views
and needs in their operations, and offer effective
redress when things go wrong.
Effective enforcement: co-ordinated enforcement
that is intelligence-led and effectively matches skills,
expertise and resources to the areas where there is
most risk and potentially consumer detriment.
Competitive markets: firms that treat customers
fairly are supported and lauded, driving out the bad,
and raising standards for transparency, fairness and
sales practice, with markets open for new entry
(at all scales) and exit.
Which? welcomes proposals to set up a new statutory,
unified consumer body to help consumers in Scotland
navigate this consumer landscape. It must be a onestop shop to help signpost consumers in the right
direction, empower them to switch products and push
companies to be more responsive to their consumers.
It must also ensure that UK regulators are adequately
representing the interests of Scottish consumers.
In order to do this, Consumer Scotland must have
the right governance structure, have the necessary
powers and duties and given the means to take action
to protect consumers.
Its success will be measured on whether it achieves
better outcomes for Scottish consumers.
Which? believes Consumer Scotland should:
•
Be a strong consumer advocate, free to challenge
policy, and focussed on achieving real outcomes
for consumers.
•
Strengthen links, coordination and oversight
across the different aspects of consumers’
engagement in a market.
•
Have the necessary powers to gather data
and intelligence about consumer detriment,
both in public and private markets.
•
Have sufficient technical policy and research
expertise to identify gaps in provision.
•
Be able to advocate on Scottish consumer
issues through good links to both Scottish
and UK regulators and governments.
•
Work well with others in the landscape, such
as Which?, Citizens Advice Scotland and Trading
Standards Scotland.
•
Be proficient in horizon scanning in order
to identify emerging issues.
•
Ensure transparency of prioritisation.
•
Ensure consumer research and insight is ongoing
and regular, testing innovative approaches.
Which? Scotland – Scottish consumer snapshot 2016
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For more informations contact:
Eva Groeneveld,
Head of Public Affairs (Scotland)
Which in Scotland, Strathmore Business Centre
10 York Place, Edinburgh, EH1 3EP
[email protected] | 0131 5231341
Which? Scotland – Scottish consumer snapshot 2016
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