Current Account Switch one year on: only small number switching
There have been just 19% more current account switches since a new speedier service was launched.
Over a million bank accounts have been switched in the first 11 months of the Current Account Switch Service, according to figures from the Payments Council. However, despite a blaze of publicity for the new service, that’s just a 19% increase on the year before.
Even the CEO of regulator the Financial Conduct Authority didn't sound too enthused in a recent Treasury Committee meeting. So why aren't more people using the service and what are the benefits?
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What is the Current Account Switch Service?
The service promises a seemless switch from one current account to another within seven working days, a marked improvement from the previous 18 to 30 days it used to take.
It also guarantees redress if anything should go wrong during the switching process. And any payments into and out of an old account will be automatically moved to the new account for 13 months after the switch.
It’s a great service, as I can testify from personal experience, although not all banks and building societies are able to truly meet the seven working day deadline.
For example, if you apply online to the Co-operative Bank it requires you to confirm personal information in person or over the phone before a switch can start. And it doesn’t ask you to do that until it’s approved your application, which in itself takes a few days.
People know it's there so why aren't they using it?
The Payments Council figures show that 70% of us are aware of the new service. So from that figure, we could draw the conclusion that the relatively low switching number means most people are happy with their bank or building society, although customer complaint figures would suggest otherwise.
So is it a case of people thinking that all banks or building societies are the same and there’s no point switching? Or it’s not that important and they just can’t be bothered? It’s probably a combination of all three.
Also, some of the top interest-paying accounts, such as TSB’s Classic Plus account and Nationwide’s FlexDirect which both pay 5%, don’t require you to do a full switch. So long as you pay in a certain amount of money each month (£500 and £1,000 respectively) you can enjoy the accounts’ benefits. So these won’t show up in the Payments Council’s figures.
But if you’re not happy with your bank or building society or you want a better deal elsewhere, there truly has never been a better time to move your money somewhere else.
Have you switched bank recently? If not, why not? Share your thoughts in the Comments below.
Compare current accounts and see if you could get a better deal
More on banking:
Virgin Money launches first current account
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Comments
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I too have switched twice - both before the recent change. The first was in protest to the outsourcing of its call-centres to India (I note that the bank has since moved the centres back to the UK). The second time was due to the prospect of being "sold" to Santander. "Not before hell freezes over" would I tolerate such a thing. Yet that too has fallen through. As much as I would like to take personal credit for these reversals, I know that I could not have been alone in my protestations. But like Overtone, my switches did not go smoothly - I spent a lot of time sorting out their errors. Maybe things have improved - but I suspect if you have several sources of income then "something" will fall through the net!
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I've switched twice, though not under the most recent procedures. Both times there were some problems - not major, but annoying. I had a positive reason for wanting to change so I considered the problems tolerable. But some people, including the Payments Council it seems, want to switch for the sake of it. OK, there is compensation if things go wrong, but I'd rather leave well alone. I might get a better deal elsewhere - 5% for a limited time, instead of 1% I get now. If the average amount in my account is about £700, the difference I would receive is about £28 a year. It's subject to tax. It isn't worth switching.
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11 September 2014