New figures from the The Payments Council, the trade body which set up the “switch guarantee” as an initiative to encourage competition in the current account market, reveal the total number of switches are up 19% on the year before last. The guarantee that consumers can switch current accounts in seven days hassle-free has also seen a wave of new offerings from M&S Bank, The Post Office and Tesco Bank.
Meanwhile existing players have focussed on making their accounts more attractive including First Direct’s 1st Account which pays a £100 cash incentive to those who switch, while Santander’s 1/2/3 Account offers monthly cashback on selected household bills and a 3% interest rate on balances over £3,000. First Direct was recently voted the best current account provider in a uSwitch poll.
David Mann at uSwitch.com, says the rise in switching is a clear indication that consumers are taking control and making the banks work for them: “We’re no longer see our bank as a lifetime companion,” he said.
When it comes to choosing who we'd like to bank with, we're most likely to be influenced by how financially secure an institution is (87%), the strength of its reputation (86%), how competitive its interest rates are (85%), and whether their money will be covered by the Financial Services Compensation Scheme, says uSwitch findings.
Current account switching checklist
- Fees, charges and interest vary a lot between bank accounts so it’s important to choose an account that suits the way you manage your money. Compare current accounts using the MoneyAdviceService.org.uk’s comparison table which covers all major providers and shows results on how you use.
- The switch will be completed in seven working days. Previously it could take up to 30 days.
- Money from the old account and all bill payments – including direct debits and standing orders – will automatically shift to the new account.
- Any stray payments to – or debits from – the old account will be automatically redirected to the new account for up to 13 months after the switch date.
- The new bank or building society must refund a customer left out of pocket if something goes wrong during the switch.
- Find out more about the switching guarantee from Simplerworld.co.uk
You can get a £125 M&S gift card when you switch accounts. Find out more here.