You are here: Home - Saving & Banking - News - Understanding -

Why new ‘ring-fencing’ rules mean you may get a new bank account number

0
Written by:
25/08/2017
New banking rules will see around a million bank account holders sent new account numbers and/or sort codes.

In fact, for some the process has already started. It’s all down to new ‘ring-fencing’ rules which the nation’s biggest banks are subject to.

The rules come into force in January 2019, though some banks have opted to get ahead at this early stage. Essentially the idea is that banks need to divide themselves into two separate organisations; one which handles the traditional high street banking services like bank accounts and savings bonds, and the other which deals with their investment activities, which may be a little riskier.

This ‘ring-fencing’ process is designed to protect account holders from another financial crisis – the idea is that if there is another global meltdown or a bank gets into trouble due to its investment activities, normal account holders will have their money entirely protected as it is effectively being held by a separate entity.

These rules only apply to the very biggest banks, those with deposits of more than £25bn. As a result, if you’re banking with a challenger bank, you won’t be affected, nor will you if you hold an account with a building society like Nationwide.

What has this got to do with my account number?

If your bank is affected by the ring fencing rules then you may be sent a new account or sort code number, or even both. It’s because your bank is splitting in two, and with that it may mean new headquarters for its retail banking services. According to the Bank of England around one million account holders will be affected.

If your details are changing, then your bank will notify you. You won’t need to do anything at first in terms of the money you receive into that account, as payments with your old account details will be forwarded onto your new account.

Banks should handle switching over your direct debits and your payslips, but it’s definitely worth keeping an eye on your account in case any rogue payments don’t make it through.

It’s worth double checking that your details have updated with any firms you make regular payments to also, for example any online subscriptions you might have. It may also be a good time to double check you’re not continuing to pay subscriptions to services you no longer need or use.

The fraud risk

The Financial Conduct Authority (FCA) said that whenever changes like this take place, there is a danger of scammers attempting to take advantage, and so it has warned account holders to be on their guard.

These are the steps you should take to ensure you stay safe:

  • Do not assume any letters, phone calls, emails or text messages that claim to be from your bank are genuine. If in the slightest doubt, check with your bank using the number on your card or statement
  • Do not give out your account or card details or make changes to payments unless you are completely certain you are dealing with someone legitimate
  • Do not share your security details, PIN or passwords to anyone. No genuine organisation will ever ask you for these
  • Don’t be rushed into making a decision quickly. No genuine organisation will mind waiting if you need time to think.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
cash
Cash returns more than 40% in 10 years

Cash savers are more used to dreary headlines about returns but a £50,000 deposit could have achieved 40% growth over...

Close