Switching. It’s a simple enough concept, yet many of us don’t do it – whether through fear, laziness, or simply because we don’t realise we can.
The Competition and Markets Authority (CMA) is investigating how banks can make switching easier given that only 3% of people switched their current account in 2014, while a whopping 57% have been with their current account provider for more than 10 years.
But why wait for the results of the report to switch when you can reap the rewards now?
Until 2013, I used the current account that was set up for me as a child. I wasn’t earning anything from it, but neither had I experienced bad service that would have given me the boot up my backside to leave.
However, the launch of the free Current Account Switch Service that year, which promises to switch current accounts in seven days, changed that. Yes, I experienced slight teething problems immediately after switching – my standing orders hadn’t been automatically set up – but I got the issue fixed and I’ve been reaping the rewards of a high-interest paying account ever since.
My boyfriend is another advocate of the scheme – he’s switched current account three times in just under three years. Each time he’s earned around £125 for doing so – so around £375 in total – plus, with his latest account, he also earns an additional £5 a month in interest.
Of course, switching can have a short-term impact on your credit score, so if you’re applying for a mortgage or other credit it’s best to switch after that.
With banks competing to offer the most attractive switching deals, see this week’s top current accounts to find the best account for your needs. Once done, just ask your new bank to make the switch for you and it’ll do the rest. See Simplerworld.co.uk for more details.
But don’t stop there, next see if you can save by switching energy tariff. The CMA, which is consulting on reforms to the energy market, says about 70% of people with the Big Six energy firms are on more expensive standard variable tariffs, and that the average person could save more than £300 by switching.
One of the first things I did when I recently moved into a new flat was to switch my energy supplier, saving just under £250 a year, and it was really easy to do.
Just compare tariffs using an energy comparison website – you can do this with our comparison tool. Once you’ve found the cheapest tariff, start the switching process online with your new supplier – it will sort it all out for you. Just check there are no early exit fees before switching.
And don’t be put off if you’re a renter like me, under energy regulator Ofgem’s rules, “if a tenant is directly responsible for paying the gas and/or electricity bills, they have the right to choose their own energy supplier and the landlord or letting agent should not unreasonably prevent this”.