Around 1.2 million Brits have switched their current account to another provider in the first year of a new initiative to make it easier for people to swap their bank, building society, or account provider.
The figure of 1.2 million people switching their current account in the last year represents an increase of 22% on the previous 12 months. The “current account switch service” debuted in September 2013, and means that people are now able to move their account within seven working days, instead of up to 30 days as it was previously. More than two-thirds of Brits are aware of the service, according to the Payments Council, showing that the scheme appears to have been successful so far.
However, there are a total of 46 million current accounts in the UK, so 1.2 million switches represents just a fraction of these. Some customers may still be unaware of the benefits they could be getting if they swap their current account to a different provider.
At the moment, when people switch their account, they can’t take their account number with them. The Financial Conduct Authority is currently looking into whether this would be possible, if it would encourage more people to switch, and how much it would cost.
Why do people change?
When the government announced the current account switching service, some banks and building societies released various incentives and deals to tempt customers to move their account. These included higher interest rates and even cash payments, but they usually only lasted for a temporary period. If you’re considering moving your current account in return for a short-term incentive, make sure that once the deal has ended, you won’t be worse off than you were with your original account provider.
The rules surrounding changing who holds your current account means that people are moving between banks and building societies, and some are even moving away from these institutions.
While it is not part of the switching scheme, thinkmoney’s Personal Account provides several benefits that customers may not get with their high street current account provider. For example, thinkmoney’s account, which has a single transparent monthly fee, comes with a Money Manager service and is designed to help people budget so that their bills and standing orders are always covered. Customers with the account are never hit with overdraft fees or charges.
Thanks to the new switching service, people may start to see that there are far more choices available to them when it comes to their money.