12% jump in people switching to better current accounts
Faster current account switching rules helped bring about a 12% rise in the number of people moving to new accounts in 2014.
The Payments Council said 1.16 million moved to a new current account provider in 2014, up from 1.03 million in 2013.
In September 2014 the Current Account Switch Guarantee came into force, cutting the time it takes to switch between providers to seven working days.
Under the old system, customers had to wait up to 30 days.
The public are also becoming more aware of the new process, with two-thirds (69%) now familiar with the service, compared to 59% in 2013.
The number of banks and building societies now signed up to faster switching has now reached 36.
Today's switching figures spell bad news for many major banks. Barclays, NatWest, HSBC and Lloyds Bank suffered a combined net loss of 119,792 customers in the first six months of 2014, according to analysis by Andrew Hagger of Moneycomms.
The troubled Co-operative, which suffered from a number of problems last year, also lost 19,103 customers in the second quarter of 2014 – despite offering customers £100 to switch to them plus a £25 donation to the charity of the customer's choice.
By contrast, Santander saw a net gain of 97,238 – an increase Hagger puts down to its attractive 3% on balances between £3,000 and £20,000. Halifax saw a gain of 15,125 and Nationwide was up 26,450 customers.
Dan Plant, consumer expert at MoneySuperMarket said: "The 12% increase in people switching current accounts in 2014 compared to 2013 is encouraging – though perhaps not the game-changer people expected when the seven-day switch was launched in September 2013.
"It looks as though banks and building societies still have some way to go to stir up excitement about the benefits of switching your bank account – the lack of innovative new products hasn't helped that either."
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.