Current account switching at new low

woman at cash machine Image copyright Getty Images

The number of people switching their current account to another provider has fallen to a new low, according to industry figures.

Just 57,779 used the seven day switching service to move accounts in September, the lowest number since the scheme was launched four years ago.

The drop came in spite of an advertising campaign during the month, designed to raise awareness.

Adverts were placed on TV, radio, in national newspapers and online.

The reluctance to move also comes in spite of the potential savings on offer, and financial incentives being offered by the banks.

The Clydesdale and Yorkshire banks are currently offering account holders £250, for example, while HSBC is offering £200 if people move and stay loyal for a year.

'£92 a year savings'

The number of people switching in September was half the number it was in March last year, when 120,774 moved account.

Image copyright Bacs
Image caption Advertising campaigns have consistently failed to persuade people to switch

BACS - which runs the Current Account Switching Service - already promised to improve the scheme in January this year.

It told the Competition and Markets Authority (CMA) that it would extend the period in which money is redirected from a customer's old account to the new one.

The idea was to give consumers extra confidence that their money would not go astray.

But account holders do not appear to have been convinced that switching is worthwhile.

Reality Check: Can you really save £92 a year by switching account?

That is despite the fact that, after a two-year inquiry, the CMA said consumers could save up to £92 a year if they moved their account.

The news will also be a blow to the Treasury, which originally said it would rely on the scheme to improve competition in the banking sector.

BACS said that over four million customers had moved their accounts since 2013.

The banks that are gaining the most account-holders are Nationwide, TSB and HSBC. The ones losing the most are Barclays, Clydesdale and NatWest.

How does seven-day switching work?

  • In all, 40 UK banks and building societies offer the seven-day guarantee
  • Apply to a new bank: it will do the rest
  • Choose a date to switch
  • All direct debits, standing orders and payments in and out will be transferred
  • Further payments to the old account will be forwarded to the new one
  • Joint account holders need permission of both parties
  • Overdrafts can be transferred only if the new bank agrees
  • Further details can be found here

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