Current account switching up 17%
Current account switching increased by 17% in the last three months of 2013 as consumers felt confident enough to "break free from the shackles of their old banks".
Following the introduction of the seven-day switching guarantee in September, in the final quarter of 2013, the number of current account customers switching to new providers jumped by 17% compared to a year earlier.
Michael Ossei, personal finance expert at uSwitch.com, said: "We're really encouraged by these figures - consumers are finally feeling confident enough to break free from the shackles of their old banks and move to a better deal.
"And, with cash incentives of up to £100 on offer as well as interest rates of up to 5% on in-credit balances, people have everything to gain by switching their current account."
Figures from the switching website reveal that its users have expressed most interest in the First Direct 1st Account and the Halifax Reward account.
Ossei added: "The challenge facing the industry now is how to make competition work harder. Instead of the Big Four – Barclays, HSBC, Lloyds and RBS – winning customers thanks to their hefty advertising budgets, we want to see the likes to TSB, Tesco, the Post Office and Metro Bank gaining a larger share of the market."
Earlier this week, the Post Office extended its current account pilot scheme, meaning there are now 101 branches in East Anglia, the East Midlands and the East of England offering a range of three current accounts. However, that still leaves around 11,400 branches with no current accounts available to customers.
Ossei remains optimistic following the uptick in switching numbers. He said: "With the equivalent of 24,000 consumers switching their current account every week, the market is on the move. Confidence is up and this can only mean banks will have to work harder to both keep their existing customers and win new ones – meaning better value and more choice for consumers."
An account opened with a clearing bank (few building societies offer current accounts) that provides the ability to draw cash (usually via a debit card) or cheques from the account. Some pay fairly minimal rates of interest if the account is in credit. Most current accounts insist your monthly income (salary or pension) is paid directly in each month and they offer a number of optional services – such as overdrafts and charge cards – which are negotiable but will incur fees.