Finance Choices
A million people switching current accounts
Almost a million people a year are now swapping their current accounts as competition between providers hots up.
Comparison website MoneyExpert.com has found that more than 80,000 people a month are swapping current accounts, twice as many as five years ago.
There are now more than 100 current accounts on the market - offering services including cashback, interest free overdrafts, hefty interest on balances, and free use of cards abroad.
Along with new features, switching current accounts has also been made easier by rule changes making moving from one provider to another easier than ever before.
"In the past, if you wanted to change your current account you had to contact every organisation you had a direct debit or standing order with, and inform them of your new banking details," said MoneyExpert marketing director Peter Marshall.
"Now, the bank you are moving to will take care of that. Your existing bank has to provide the necessary details to your new bank within three working days of a transfer request being submitted," he added.
"Your new bank then ensures everything is moved over so all you have to do is fill in the application form and sign it."
But with a wide range of accounts to choose from, consumers should review their financial habits before switching.
People who regularly go overdrawn would benefit to a move to Alliance & Leicester or Nationwide; for people wanting their money to work for them Cahoot and Lloyds TSB are among those offering interest on balances over four per cent; for those who do not keep much money in their current account Halifax allows customers to earn one per cent cashback on everything they buy; while Nationwide is generally seen as the best provider for people wanting to use their cards abroad.
Comparison website MoneyExpert.com has found that more than 80,000 people a month are swapping current accounts, twice as many as five years ago.
There are now more than 100 current accounts on the market - offering services including cashback, interest free overdrafts, hefty interest on balances, and free use of cards abroad.
Along with new features, switching current accounts has also been made easier by rule changes making moving from one provider to another easier than ever before.
"In the past, if you wanted to change your current account you had to contact every organisation you had a direct debit or standing order with, and inform them of your new banking details," said MoneyExpert marketing director Peter Marshall.
"Now, the bank you are moving to will take care of that. Your existing bank has to provide the necessary details to your new bank within three working days of a transfer request being submitted," he added.
"Your new bank then ensures everything is moved over so all you have to do is fill in the application form and sign it."
But with a wide range of accounts to choose from, consumers should review their financial habits before switching.
People who regularly go overdrawn would benefit to a move to Alliance & Leicester or Nationwide; for people wanting their money to work for them Cahoot and Lloyds TSB are among those offering interest on balances over four per cent; for those who do not keep much money in their current account Halifax allows customers to earn one per cent cashback on everything they buy; while Nationwide is generally seen as the best provider for people wanting to use their cards abroad.
posted by Bruce Wayne at 9:23 AM
A million people switching current accounts
6 Comments:
Has anyone switched to Alliance & Leicester current account and used their switching service? We are in the process and they have been appalling - direct debits have been closed but not switched - I have had to rearrange almost all the DDs cos they have not been paid for a month. Similar story with some standing orders. In addition they got the name on the cheque book and guarantee card incorrect - still getting letters with the wrong name after 6 weeks.
I swwitched current account about 6 years ago and did it myself - it was a lot less hassle and there were far fewer mistakes!
I would be interested to know whether I have just been unlucky or whether their service really is awful.
They switched all mine fine, I couldn't fault them.
The UK seems to finally be waking up to the gains that can be made by switching current accounts.
After years of campaigning, Britons now look ready to move away from current accounts that pay derisory levels of interest and charge customers through the nose for going overdrawn.
New research shows that some 2.9 million British residents are planning to switch current accounts in the next 12 months, as better and better deals are brought to the market.
Consumers can now benefit from free card use abroad, earn over four per cent on positive balances, secure zero-per cent overdraft rates, and even earn cashback on purchases.
More recently, major banks have been offering customers savings accounts paying as much as ten per cent interest if they have their salary or pension paid into the linked current account.
And consumers are finally taking notice - new research for Defaqto and MoneyExpert.com indicates.
The firms? data reveals that some four million Britons paid penalty fees on their current accounts last year and this is one of the reasons Brits are planning to shift providers.
"Industry experts have long argued that current account customers are unwilling to move banks as they believe the switch will be too much hassle," said Sean Gardner, chief executive at MoneyExpert.com.
"However this could be the year that customers finally start to wake up to the benefits of changing account and realise that a bank account doesn?t have to be for life. Banks and building societies are keen to win new customers and are making it worth your while switching so customers should respond."
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