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Record level of bank switching in September as savers flock to cash perks

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27/10/2022
The cost-of-living crisis is spurring savers to move their current accounts to banks offering cash perks or higher interest rates, with September seeing a record number of switchers for 2022, data reveals.

A total of 222,108 bank switches took place in the three months to September 2022, up from the 191,777 reported in the previous quarter to June.

According to Pay.UK, which owns and operates the Current Account Switch Service (CASS), the growth in switching “coincides with a changing economic climate in the UK, which has led many to assess their options and favour current accounts that offer a switching incentive or higher rate of interest”.

It said monthly switch volumes increased every month in the quarter, from 57,204 in July, to 74,459 in August and reached a record level for 2022 in September with 90,445 taking place.

During this time, a number of banks and building societies offered cash switch deals of up to £175.

On a rolling 12-month total, there has also been an annual increase between Q2 2022 (850,000) and Q3 at 860,000.

HSBS, Lloyds and Starling welcome most switchers

Based on customer switch data which is three months behind due to commercial sensitivity, HSBC gained 45,686 customers in Q2 2022, with the numbers bolstered by its current account switch incentive which gave new customers £170 cash for the move.

However, 27,639 customers bolted from the banking giant, leaving it with a net gain of 18,047 – still the largest net gain across 47 banking brands.

This reverses the previous quarter’s exodus of customers in which HSBC suffered the greatest loss with 29,960 customers switching away, despite seeing the largest gain of 35,136 customers. Overall, in Q1 2022, it was left with a net gain of just 5,176.

Lloyds Bank came in second place in the switching league in Q2, as it reported a net gain of 11,173 customers. This was followed by challenger bank Starling, which saw a net gain of 9,880.

Nationwide (5,598) and Monzo Bank (4,559) were in fourth and fifth place, respectively.

Pay.UK said that while the majority of the providers in the top five offered financial switching incentives during this period, two did not, “highlighting that for many end-users features such as customer service and mobile app ease-of-use were important”.

It added that at least two digital banks have appeared in the ‘top five’ performing current account providers in each quarter of 2022 so far.

Meanwhile, Santander suffered the largest net loss with -20,220, followed by Barclays with -14,421 and TSB with -13,039.

Many consider different providers

David Piper, head of service lines at Pay.UK, said: “Amidst rising living costs, people are increasingly looking for a current account that works best for them; offering a positive on and offline experience as well as quality customer service. This is continuing to lead many to consider different providers.

“Those looking for a new current account can switch with confidence, safe in the knowledge that switching to an account that suits them better is a quick, free, and easy process through the Current Account Switch Service.”

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