Current account switching falls 10.6% in 2015
Cash payments, 5% interest rates and cashback deals haven’t been enough to prod more people into switching current account, according to the latest industry data.
Figures from the Current Account Switching Service (Cass) show the number of people switching current account fell 10.6% in 2015. Around one million people moved bank, but that’s a tiny proportion of the estimated 50 million current account holders in the UK.
Even though the top accounts can be highly rewarding, people aren’t transferring because they don’t trust the transfer process, but Cass claims 99% of current account moves complete in a week without problems.
Others may be put off simply because they can’t see the point, or find it hard to compare accounts.
“Despite 2015 seeing some of the best financial incentives for switchers, many still struggle to see the value in switching,” according to Richard Neudegg, at uSwitch.com.
“Shining a light on the true cost of current accounts and the available alternatives could galvanise more consumers to find out if they really have the best account for their specific needs,” he adds.
Separate research from GoCompare.com suggests inertia is the norm, and around half the country didn’t switch any major financial products in 2015. It also found people are more likely to switch insurance, mobile phone or broadband than their bank account.
Which banks are people moving to?
Between January and September, more people switched to Halifax and Santander than every other bank combined.
That’s likely because of their flagship accounts, which have regularly sat in the Moneywise best buys.
The Halifax Reward Account pays £100 for switching and then £5 each month you don’t go overdrawn.
Santander’s 123 Account pays up to 3% interest on balances of £20,000, and cashback on household bills paid by direct debit. However, it has recently increased its fees to £5 a month, so you’ll need to check if it’s worth it.
Barclays, NatWest and HSBC lost more customers via the switching service than any other bank, so if you’re a customer it’s worth checking if you’re getting good value.
How can I find the right bank account for me?
Each week, we review the current account market to find the best deals for overdrafts, interest payments, rewards and sign-up offers.
However, it’s better still to use the Midata scheme, which gives you a personal recommendation on the best account for you, based your spending over the last year.
You’ll need to download your banking history, which most online banks let you do with a single click. Then go to money.gocompare.com/currentaccounts/midata, for a free tool that crunches the numbers to get your recommendation, including how much better off you could be in pounds and pence.
You don’t need to worry about sharing your personal data, as the crunching is all done on your own computer – GoCompare.com won’t see any of the information you submit.
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.