Current account switching takes off..
After getting off to a slow start, the whizzo new switching scheme for current accounts gathered pace in the last quarter of last year, a considerable 306,240 customers switched banks between September and December last year, up 17% on the same period a year earlier.
Within this figure, 281,144 people were covered by the new service when they switched bank accounts, and a further 25,096 people switched but kept their old bank account open so were not covered (or bothered) by the guarantee. The new rules enable a switch in just seven days, rather than 30, and under the switching guarantee, banks and building societies take responsibility for transferring all direct debit and standing orders from their new customer’s old account to their new one. If anything goes wrong, the customer is entitled to be refunded interest and charges under the guarantee.
The Payments Council, who provided the figures, is overseeing the new initiative to help shake up competition in the current account market and claims that 99.6% of switches were completed within the 7 days stipulated under the new rules.
Early suggestions were that the new scheme was having little effect on bank account switching, but it does seem to be getting more and more popular, attributed to campaigns to raise both awareness of, and confidence in the new guarantee scheme. And at this rate, we’ll all be switching- figures for December 2013 alone showed 83,729 people changed current accounts, a 54% increase on December 2012.
According to the Payment Council’s latest monthly consumer awareness survey, 59% of the public are now aware of the current account switch service by December and 58% of people said they were confident about how the service worked. Seventy-five per cent now believe it would be quick and easy to switch their current account.
Of course, better offerings by the banks might also have had some impact, with a number of providers offering new perks to tempt new customers, as well as dissuading existing customers from straying. If you are thinking of switching, make sure you compare account running costs as well as switching benefits, and watch out for switching bonuses, either direct from the switchee bank, or through cashback websites like Quidco or Topcashback.