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Third unenthused by banks’ cash for switch offers

Joanna Faith
Written By:
Joanna Faith
Posted:
Updated:
16/08/2013

One in three current account customers would not be motivated to change banks for a cash incentive, despite competition heating up ahead of new switching rules.

A new service making it easier for consumers to switch current accounts will kick in from 16 September, The Payments Council confirmed today.

Customers will be able to move from one provider to another on a date that suits them and the process will take seven working days, an improvement on the current 18-30 days.

Two banks have already unveiled cash incentives to encourage people to switch. This week First Direct increased its switching incentive from £100 to £125, while Halifax is still offering new customers £100.

However, a poll of 1,355 UK adults by uSwitch.com revealed that financial stability (74%) was the most important factor when it comes to picking a brand to look after their money

Michael Ossei, personal finance expert at uSwitch.com, said: “Consumers want to know that their money is in safe hands, and this is proving to be more of a siren call than the charms of good service and value for money.”

Just one in ten consumers (11%) have switched current account over the last 12 months but 42% are more likely to do so when the new Current Account Switch Service comes in – while 46% will wait and see, the research found.

Despite this, one in five consumers (18%) are not satisfied with their current account provider, blaming excess charges (45%), poor interest rates (36%) and in-branch queues (21%).

However, consumers would choose a traditional high street bank (49%) over a building society (23%), internet (22%) or retail brand (3%) and most would choose a bank that is financially secure (74%) and has a good reputation (71%), over one that is ethical (27%) or a household name (26%).


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