Switch banks from today and you could save £600

16 September 2013

As of today, it’s faster and easier to switch banks – and you could save a wedge. The Payments Council current account switch guarantee has come into effect, in an attempt to encourage more competition in the banking sector.

current_account_switch_guarantee_scheme

It used to take 30 days and a lot of pleading phone calls from your jilted bank, but now the UK’s 46 million customers are being actively encouraged to switch, following a report from the Independent Commission in 2011. And we could find ourselves a lot better off.

‘It's not uncommon to save £500 or £600 by switching your bank.’ Says Mark Fiander from the Money Advice Centre. ‘Now whether that's because you're not paying fees or charges, or equally if you're not getting interest that's sitting in your current account, it can really add up.’

So are we all going to go out and shop around? Last year 2 million people switched accounts, but chances are we probably won’t bother. In fact, projected figures from the Centre of Economics and Business Research show that only about 5% of us will bother to change banks – in the next TEN YEARS.

But if the seven day switching process actually works, and with Virgin Money and Tesco set to launch new current accounts next year, could switching your bank become like shopping for the best energy deal? Or will we just stick with the same old rubbish bank, moan about it, and put up with it forever like a crap boyfriend who leaves suspiciously crusty socks on the radiator?

TOPICS:   Banking   Investments   Consumer Advice

4 comments

  • Alexis
    I don't see how this new system will solve the weak link - the businesses taking money through Direct Debits. The onus is on them to update their Direct Debit records if a bank tells them the details have changed. Half the time companies don't do it and try to take payments from the old account. Then you end up getting threatened with having your utilities disconnected and you have to ring round all your suppliers telling them your DD's have changed because you've changed banks.
  • Alexis
    The other problem is overdrafts. It's a pain in the arse switching because you have to persuade your new bank to give you an overdraft as big as the one you have at the moment.
  • Justin A.
    We don't need to know about Lucy's boyfriend's crusty socks. Just bin them and treat him to new ones.
  • Andy A.
    @alexis - the whole idea of 7 day account switching is that a new industry cross bank gateway is being installed that will resolve the issue of direct debits still trying to get money from your old bank account. Even if the originators don't get informed or don't bother, they will be redirected to your new account at your new bank.\ more info at: http://www.paymentscouncil.org.uk/switch_service/account_switching_explained/benefits_of_the_new_service/ Obviously this will informed article should have made that clear. Thats the idea anyhow, with something similar to how faster payments was implemented a few years back

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