Business

Bank account swaps 'picking up'

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More people are switching current accounts - but the total remains a tiny fraction of the market, latest figures show.

A total of 309,678 changed banks in the first three months of the year, the Current Account Switch Service said, including 124,615 switches in March.

This was the highest monthly total since the service launched in 2013.

With 68 million active current accounts in the UK, the vast majority of customers remain loyal to their bank.

Some experts have questioned the model of current accounts in the UK, as revealed in a recent BBC News website series on the subject.

'Stung'

Overall there have been 2.8 million switches since 2013. The switching service means that customers can move over to the new account within seven working days. All regular incoming and outgoing payments are automatically switched over from the old account.

"There are are still too few people switching," said Hannah Maundrell, from financial comparison website Money.co.uk.

"It is very telling that the competition watchdog has delayed its report into how to reinvigorate the industry because it suggests there is no easy solution.

"The key problem with current accounts is overdraft charges, this is where people are getting significantly and consistently stung."

Santander, the Halifax, and Nationwide Building Society made the biggest gains of customers who have switched, according to the latest figures.

One commentator suggested that this showed rewards for switching were more of an incentive for potential customers than the arrival of new banks on the market.

"The challenger bank threat does not really seem to have materialised as it appears that consumers are still chasing accounts offering interest and rewards, particularly while savings rates are in the doldrums," said Andrew Hagger, of Moneycomms.

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