There have been just 19% more current account switches since a new speedier service was launched.
Over a million bank accounts have been switched in the first 11 months of the Current Account Switch Service, according to figures from the Payments Council. However, despite a blaze of publicity for the new service, that’s just a 19% increase on the year before.
Even the CEO of regulator the Financial Conduct Authority didn't sound too enthused in a recent Treasury Committee meeting. So why aren't more people using the service and what are the benefits?
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What is the Current Account Switch Service?
The service promises a seemless switch from one current account to another within seven working days, a marked improvement from the previous 18 to 30 days it used to take.
It also guarantees redress if anything should go wrong during the switching process. And any payments into and out of an old account will be automatically moved to the new account for 13 months after the switch.
It’s a great service, as I can testify from personal experience, although not all banks and building societies are able to truly meet the seven working day deadline.
For example, if you apply online to the Co-operative Bank it requires you to confirm personal information in person or over the phone before a switch can start. And it doesn’t ask you to do that until it’s approved your application, which in itself takes a few days.
People know it's there so why aren't they using it?
The Payments Council figures show that 70% of us are aware of the new service. So from that figure, we could draw the conclusion that the relatively low switching number means most people are happy with their bank or building society, although customer complaint figures would suggest otherwise.
So is it a case of people thinking that all banks or building societies are the same and there’s no point switching? Or it’s not that important and they just can’t be bothered? It’s probably a combination of all three.
Also, some of the top interest-paying accounts, such as TSB’s Classic Plus account and Nationwide’s FlexDirect which both pay 5%, don’t require you to do a full switch. So long as you pay in a certain amount of money each month (£500 and £1,000 respectively) you can enjoy the accounts’ benefits. So these won’t show up in the Payments Council’s figures.
But if you’re not happy with your bank or building society or you want a better deal elsewhere, there truly has never been a better time to move your money somewhere else.
Have you switched bank recently? If not, why not? Share your thoughts in the Comments below.
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