Just 5% have switched bank account despite ‘£70 saving’ if they do
Just 3.5 million people have switched bank accounts since 2013 out of an estimated 70 million active account holders in the UK, official figures reveal.
Data from Bacs on behalf of the Current Account Switch Service (CASS) shows there were 208,387 switches during the last three months of 2016, down from the 234,359 in the previous three months.
In the 12 months to 31 December 2016 there were 1.01 million switches – down on the 1.03 million recorded a year earlier.
In total, since the launch of the seven-working day switch guarantee in September 2013, there have been just over 3.5 million switches, with more than 99% completed within the time frame.
However, with an estimated 70 million current accounts in the UK, the 3.5 million switches since 2013 represents just a tiny fraction – 5%.
Bacs statistics also show that 7,854 decided to keep their old account open when they switched, falling outside of the CASS guarantee.
Kevin Mountford, banking expert at price comparison site, MoneySuperMarket, said: “The number of people switching their current account is yet again underwhelming. Awareness levels of the service may have reached a record high, but more needs to be done to convert this into switches.”
A Competition and Markets Authority (CMA) investigation into the retail banking sector found customers switching could stand to gain around £70 each.
The CMA has requested further improvements to the switch service, including an increased redirection period for payments made to an old account and better information for overdraft users, but Mountford says it will take more than this to significantly boost switching numbers.
“Consumers need more of an incentive and this will only come if providers create more competitive and enticing products. Only a handful are making net gains on switching at the moment, so it’s in the banks’ best interests to shake up their offers too.”
The statistics come as research reveals banks have cut back on cash perks used to attract new current account customers.
The biggest winners and losers
Bacs also published the latest statistics showing which banks and building societies had the largest number of customer gains and losses in the second quarter of 2016.
Santander had the largest net gain at 46,208, followed by Nationwide which had a net gain of 24,999 and in third place was Halifax which recorded a 22,101 net gain.
The biggest losers were Barclays with 26,764 deciding to switch away, followed by Natwest which recorded a net loss of 17,327. Despite gaining 15,064 customers, Lloyds Bank actually lost 30,312 customers in Q2, leaving it in third place with a net loss of 15,248.
Low volume participants include: Arbuthnot Latham, C Hoare & Co, Commerzbank, Cumberland Building Society, Duncan Lawrie, Hampden & Co, Investec, Reliance Bank, Virgin Money and Weatherbys Bank switches.