Is your current account working for you?
Published 28 January 2013 by Helen Gradwell
The OFT has recommended that banks make their current accounts more transparent to make it easier for customers to compare and switch. This may make the market more competitive – which could mean more choice for consumers.
The Office of Fair Trading (OFT) has looked at personal accounts in Britain and found that - although some areas have seen improvement - the system is still flawed. The OFT last looked at current accounts in 2008.
In terms of improvement, the OFT estimates that - because of the fall in unauthorised overdraft fees between 2007 and 2011 - customers could have saved up to £928 million per year.
There is still room for improvement, however - and some of the main problems that the OFT pointed out included:
- The major banks take up a large proportion of the market - so it's difficult for new account providers to enter.
- Overdraft charging systems are too complicated.
- Comparing the cost of current accounts can be difficult.
- Customers lack confidence in the switching process.
As a result, the current account market isn't working well for consumers or the economy.
How can current accounts be improved?
The OFT set out some specific recommendations for improving the current account market for consumers.
For example, it recommended a review into bank account number portability. This would allow customers to keep their account number while switching - even to a new bank.
Annual account summaries should be available at any time of the year to make comparing accounts simpler.
The OFT has also suggested that banks advertise a text alert system that will send a message to a customer when they're close to their overdraft limit.
Alternative account providers
Although it can be difficult for alternative providers to break into the current account market, there are still alternative accounts available.
For example, the thinkmoney Managed Current Account charges one transparent monthly fee - £14.50 for a single account - on the promise that you won't have to deal with unexpected costs or charges (including overdraft charges).
Switching is simple too, because there's no credit check - and all your payments and Direct Debits will be switched for you.
Click here for more information about switching to the thinkmoney Managed Current Account, a current account alternative, or fill in the form below to begin your application.
Included in the cost is a built-in budgeting service and your own dedicated Money Manager. When money enters your account, they'll make sure that all your regular bills and payments are dealt with. Any leftover money will then be yours to spend how you like.