Customer apathy rules as fewer switch bank accounts despite big incentives
Despite financial inducements and efforts by financial regulators to get more people to switch bank accounts, fewer people are doing so.
In the last 12 months, 1.05m people moved their current accounts, according to Bacs, which operates the service. That represents a drop of 4.7% on the previous 12 month period.
“With 65 million current account holders in the UK, movement is minimal,” said Hannah Maundrell, editor of money.co.uk. Even with big cash incentives on the table, people just aren’t switching.”
Marks and Spencer offers up to £220 worth of incentives, with the Co-Op offering £150 to new account holders, and the Halifax £125.
The Competition and Markets Authority (CMA) has spent more than 18 months looking at ways of getting more people to switch accounts.
It has said that consumers could save £116 a year by doing so.
However, the Bacs figures show that the number of people switching in the past six months was 4% up on the same period last year.
Of those who did switch, the Halifax proved to be the most popular new bank, attracting 31,000 customers.
Barclays was the biggest loser, with a net loss of 27,000.
Previously Santander was one of the most popular banks to switch to, as it offers a cashback scheme of up to 3%. However in January it raised the fee for its 123 account to £5 a month.
“Details of the intended price hike first came to light on 14th September 2015, and it appears to have had a dramatic impact on the net number of new accounts opened,” said Andrew Hagger of Moneycomms.co.uk.