UK bank customers could save up to £600 by switching current accounts, with the process set to become faster and easier from Monday. The industry has pledged to complete transfers within seven working days, down from the previous 30.
The move follows a report by the Independent Commission on Banking, chaired by Sir John Vickers, which recommended easier switching to promote competition. Mark Fiander of the Money Advice Service said it was definitely worth switching, noting that savings of £500 or £600 are not uncommon, whether through lower fees or better interest.
Frequent overdraft users could benefit most, and some banks offer cash-back deals worth hundreds of pounds. However, the key question is how many customers will actually switch. Around two million people moved accounts last year, according to the Payments Council.
Some surveys suggest that could rise to over five million, while others predict customer inertia will persist. Research by the Centre for Economics and Business Research for Metro Bank indicates switching numbers may only double within 10 years, to about 5%, still far fewer than the 10% of electricity customers who switch annually.
Craig Donaldson, chief executive of Metro Bank, said the industry needed to make seven-day switching work and create more choice. Additional choice is expected next year when Virgin Money and Tesco launch current accounts. But some customers remain reluctant, with one London woman describing switching as 'too much hassle', while another, Taz Miah, said he would switch for compelling offers.
The government-backed Money Advice Service is launching a comparison tool on Monday to help customers find the best value, and the Payments Council has set up the Current Account Switch Service with details on participating banks.
