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Switching bank accounts fall despite cash incentives and efforts from lenders and the UK financial regulators. Fewer people are doing so.
According to payment body Bacs, 1.05m people switched to another current account provider last year. That represents a 4.7% declined compared with the previous 12 month period.
Hannah Maundrell, editor of money.co.uk, said:
“With 65 million current account holders in the UK, movement is minimal”
“Even with big cash incentives on the table, people just aren’t switching.”
And it comes as a surprise. The Competition and Markets Authority has spent over 18 months looking at ways of getting more people to switch accounts. It has said that consumers could save £116 a year by doing so.
Switching bank accounts and cash incentives: The big winners
Of those people who did switch banks, Halifax, which is part of Lloyds Banking Group, was the big winner. Halifax is the most popular bank to switch to, adding 31,181 accounts. They offered £125 to new account holders.
|Bank||net gain in customers|
Barclays, which has been the subject of significant negative publicity, was the biggest loser with a net loss of more than 27,000 accounts.
|Bank||net loss of customers|
|Royal Bank of Scotland||11,430|
However, the Bacs figures show that the number of people switching in the past six months was 4% up on the same period last year.
On the other hand, Caroline Barr, a member of the Financial Services Consumer Panel, said:
“In the hearing that the onus should fall on banks to better serve loyal customers who stay with their lender for years.”
In the future, banks could be asked to remind customers of their right to switch current account. Furthermore, they could do this through an annual alert.
By March 2017, banks will be asked to prepare an open-access software interface. This interface could be used by comparison websites to offer a clearer service to customers. We’ll see in the future whether this service will cover prices, terms and conditions, and branch location.
- Author Antonietta Gonzalez
- Posted 21 July 2016