One million customers switch bank accounts but rush slows
More than a million current accounts were switched last year but the figures have dipped compared with 2015.
About 23,500 fewer switches took place across 2016 compared with a year earlier – despite consumers’ awareness of the current account switching service reaching a record high in November, figures from payments body Bacs show.
Bacs, which oversees the seven-day switching service, said 1,010,423 switches were made between January 1 and December 31 2016.
During the previous 12 months, there had been 23,516 more switches, with 1,033,939 recorded.
Bacs said that in November 2016, awareness of the switching service reached a record high, with more than three-quarters (78%) of people saying they have heard of it, up 20 percentage points since the service launched in 2013.
More than 3.5 million switches have taken place since the service, which aims to take the hassle out of moving current accounts, was launched.
The switching service has reduced the length of time it takes to switch from up to 30 working days to just seven. Outgoing and incoming payments are automatically moved to the new account and the old account is closed.
Banks and building societies also released figures showing the number of account switches using the service between April 1 and June 30 2016.
They show Santander, Nationwide Building Society and Halifax continued to make particularly strong gains, with newer challengers Tesco Bank and TSB also seeing net increases.
Barclays, HSBC, Lloyds Bank, NatWest and RBS all made net losses across the second quarter of 2016. The figures only cover customers using the current account switching service, not customers switching outside the service.
In August 2016, Santander announced it was halving a 3% interest rate offered on its 123 current account. From November 1 2016, the account has paid a rate of 1.5% on balances up to £20,000.
Other current account providers have also followed suit by announcing a series of rate cuts, after the Bank of England base rate fell to 0.25%.
The Competition and Markets Authority (CMA) recently said it had accepted undertakings from Bacs to make improvements to the switching service within a year.
A previous investigation by the CMA found someone could save £92 a year on average by switching to a deal that better suits their needs. Savings of about £80 a year on average are available for small businesses by ditching and switching.
As part of the agreed improvements, Bacs has already extended a redirection period for stray payments going to the old account.
Here are the net gains or losses made by providers in terms of switches where the current account switching service was used. The figures cover April 1 to June 30 2016 and are therefore six months in arrears:
:: AIB Group (UK) plc (includes First Trust Bank and Allied Irish Bank GB brands), minus 686
:: Bank of Ireland (includes the Post Office brand), minus 520
:: Bank of Scotland, minus 1,571
:: Barclays, minus 26,764
:: Clydesdale Bank (includes Yorkshire Bank brand), minus 6,080
:: Co-operative (includes Smile brand), minus 6,093
:: Danske, minus 569
:: Halifax, 22,101
:: HSBC (includes First Direct and Marks & Spencer Bank brands), minus 12,609
:: Lloyds Bank, minus 15,248
:: Nationwide Building Society, 24,999
:: NatWest, minus 17,327
:: RBS (includes Adam & Company, Coutts and Isle of Man brands), minus 9,297
:: Santander, 46,208
:: Tesco Bank, 238
:: TSB, 1,467
:: Ulster Bank, minus 1,186