How we calculate our product ratings

Our unique Product Ratings are mostly designed to help customers compare financial products on quality. We rate products from one to five stars, depending on the specific features included as standard.

In some sectors, such as credit cards, banking and investment platforms, our ratings are more focused on providing a simpler way to understand the cost and benefits of a product. For example, investment platforms have numerous different charges that are applied in different ways. Our ratings use scenarios to calculate which platforms offer the lowest costs overall, and also penalise companies for having high ancillary charges - such as fees for transferring your investments to another provider.

Setting a high bar

In a world where every company seems to be rated four or five stars, we are committed to creating ratings that give a fair reflection of how companies and their products really stack up. We make sure that no more than 15% of products are rated 5 stars in any sector in our product ratings at the start of each calendar year - and in some sectors we have far fewer. If products improve during the year and we end up with more than 15% rated 5 stars, we then raise the bar the following year to ensure the sector is brought back below our 15% threshold.

Why we developed our ratings

The way that consumers buy financial products has changed over the past two decades. The growth of comparison sites has seen many more customers making their own choices when it comes to banking and insurance products, rather than taking advice.

In such an environment, customers are looking for shortcuts to make better decisions. Comparison sites have made it easier for customers to compare prices - but it's important that people can also compare products and brands on quality and service.

Our ratings are designed to help customers make more informed decisions, but they should not be taken as recommendations or advice. Every customer has different needs, and our ratings are simply designed as a short cut to help consumers make sense of the complex world of financial products.

How we formed our core criteria

We compiled a comprehensive database of key product features for thousands of direct-to-consumer products in the sectors we rate.

We then selected the most important features for each sector - based on our expertise, claims data, industry feedback, and customer research. These product features formed the basis of our ‘Red Line Requirements' - which must be satisfied for a product to qualify for a five star rating.

To see our Red Line Requirements for the products we rate, take a look at the PDFs at the bottom of this page.

How we collect data

We collect data by conducting analyses of product documents and by mystery shopping. We do not rely on information provided by companies. Instead, we carry out an ongoing live checking schedule to ensure our data is accurate and up to date.

However, we do invite companies to let us know about upcoming changes to their products, or if new products are being launched. We’ll then conduct our own fact-checking to confirm the new details. If you’d like to get in touch to tell us about a change, contact us at: corporate@fairerfinance.com.

How we rate financial products

We rate all financial products by assessing them against our Red Line Requirements. To achieve a five-star rating, products must meet or exceed every one of our Red Line Requirements.

Each Red Line is worth between 0 and 1, 1 meaning this feature has met or exceeded our red line and fractions of points allocated proportionately, dependent on how far the feature falls from the Red Line.

For example, in car insurance, at least £500-worth of cover for audio equipment must be provided to pass the Red Line in this area. We award 1 point to products which offer this much cover or more.

Let’s say a product offered £300-worth of cover. £300 is 60% of £500. So the product would receive a score of 0.6 for this feature.

We allocate a score of 0 for a Red Line if the product in question doesn’t have the relevant feature.

We've designed our scoring system in this way so that it can't be gamed. Companies must meet all Red Line Requirements to get five stars. They won't get more credit for adding in additional cover beyond our Red Line. They also won't get extra points for product features which don’t relate to our Red Lines.

Ratings calculation

Once all Red Line Requirements have been assessed, we add up all the scores to provide a total score for that financial product. Other star ratings are allocated using a measure of how far away each product is from achieving the maximum score. The maximum score varies depending on product type.

For a product to get a five-star rating, it must achieve the maximum number of points available by passing all our Red Line Requirements.

In most sectors, to receive 4 stars, a product must lose no more than 10% of the points. To receive 3 stars, a product must lose no more than 20% of the points. To receive 2 stars, a product must lose no more than 30% of the points. And products that lose more than 40% of the points are rated 1 star.

As one example, where the maximum score for a product area was 10, the star ratings would line up as follows:

  • 10 = 5 Star

  • 9 to 9.99 = 4 Star

  • 8 to 8.99 = 3 Star

  • 7 to 7.99 = 2 Star

  • Less than 6.99 = 1 Star

What our Product Ratings mean

For insurance products

Five stars - A product that receives a five-star rating provides enough cover in all areas where the majority of customers might reasonably need to make a claim. As with any rating system, there may be circumstances where our five-star rated products don't go far enough for individuals - but a five-star product should be adequate for most people, most of the time.

Four stars - A product with a four-star rating will have missed out on one or more of our red line requirements. It will still have an above average set of product features.

Three stars - A product with a three-star rating will have fallen short of our Red Line Requirements by a greater margin. It will have average features, which may be adequate for many customers.

Two stars - A product with a two-star rating is likely to fall short on a number of different criteria, and will have below average product features. It may still be suitable for certain customers.

One star - A product with a one-star rating will miss many of our red line requirements. It may be a suitable choice for some people. But anyone considering one of these products should make sure that it suits their needs, and take care to understand the limitations and exclusions to their cover.

For banking, online will writers and investment platform products

Unlike our insurance ratings, our banking, online will writing and investment platform ratings take into account the price of the product. This is because consumers can incur additional costs over the life of the product.

Five stars - A product that receives a five-star rating costs less than the average amongst its peers, and has reasonable additional fees and charges associated with the account.

Four stars - A product with a four-star rating will have missed out on one or more of our red line requirements. It will still likely be cheaper than other products in the sector, but may have one or two additional charges which are above our red lines.

Three stars - A product with a three-star rating will have fallen short of our Red Line Requirements by a greater margin. It may cost slightly more than the average, or have a number of fees and charges that are above our red lines.

Two stars - A product with a two-star rating is likely to fall short on a number of different criteria. It will probably be more expensive than its competitors and may also have additional fees and charges that don't meet our red lines. They may still be suitable for certain customers.

One star - A product with a one-star rating will miss many of our red line requirements, and is likely to be significantly more expensive. It may be a suitable choice for some people. But anyone considering one of these products should make sure that it suits their needs, and take care to understand the limitations of the product.

For our equity release ratings

Our equity release ratings focus on flexibility. Firms that have higher than average early repayment charges, or which don't provide downsizing protection are likely to get lower ratings.

However, products with lower ratings from us should be much cheaper. Adding in flexibility to products tends to raise the cost.

These ratings are designed as a stimulant for conversation with your financial adviser.

We work to assess as many products in each sector as possible; sometimes we cannot if they are only available through financial advisers or brokers. If we have missed a product within a sector where we already have ratings, please let us know and we will rate that product free of charge.

If there is a sector that we do not currently produce ratings for and you think we should, please also get in touch; we’d love to hear from you!

If you’d like to discuss using product endorsements on your marketing material, or to find out more about out methodology, please email corporate@fairerfinance.com.

Criteria and red lines by product type

Bank accounts

Breakdown cover

Business credit cards

Car insurance

Commercial vehicle insurance

Equity release

Gadget insurance

GAP Insurance

Home emergency cover

Home insurance

ISAs

Junior ISAs

Motor excess cover

Motorbike insurance

Over 50s life insurance

Private medical insurance

Small combined insurance

Travel insurance