MSE News: Current account switching hits new low

eskbanker

JuicyJesus wrote: »

Most people just genuinely can't be arsed with it, but it amazes me how the regulator can't get this.

They start a wheeze to get people to switch banks, at huge cost, on the basis that not enough people are switching. Then a few years later, not enough people are switching, so they start another hugely expensive wheeze. Rinse and repeat again.

The regulator can't seem to grasp that most people don't give a sh*t about who provides their bank account.

Not sure I'm with you on "another hugely expensive wheeze" started because "not enough people are switching", are you referring to Open Banking (which AFAIK was started for entirely different reasons, and, as above, could reduce switching) or something else?

Edit: I came across https://www.gov.uk/government/news/bank-switching-to-be-overhauled which is probably what you were referring to, although tbh it sounds more like some tinkering in the margins rather than meaningful (and expensive!) reform....

Shakin_Steve

The switching ads which are appearing at the moment promise ‘average savings of £92 a year’. If we leave aside the switching bonus which, of course, is not mentioned, then surely most people are going to say ‘I can’t be bothered for less than 2 quid a week’?

eskbanker

Consumerist wrote: »

I don't know where this concept of loyalty comes into banking. In my view, substituting the word "laziness" for the word "loyalty" would be nearer the truth in the switching parlance - be it energy, banking or anything else.

I believe it's recognised that stability and longevity of banking arrangements is usually seen as a positive by credit rating agencies but yes, if this was to be characterised as 'loyalty' then it's only in one direction because there's precious little evidence that banks recognise/reward long-time customers and indeed there are numerous incentives (such as switching offers or promotional interest deals) only available to new rather than existing customers!

RayJ125

It's really up to individuals how paranoid they want to be about banks T&Cs, but you have to question exactly what is the motivation from this example taken from Halifax's:

"How we and your Old Bank will use your information.
In order to fulfil your Current Account Switch in accordance with this Agreement, we and your Old Bank may:
2.1
process, use, manage, control and release information that you give us, that we capture or that we already hold about you, including:
•
information (such as details of payment beneficiaries) that you have provided to your Old Bank not only in relation to your Old Account but also in relation to any other account(s) you hold with your Old Bank; and,
•
information about other individuals with whom you hold any accounts jointly either at your Old Bank or with us.
Note that this means that anyone with whom you hold your New Account jointly will be able to see the beneficiaries of payments that you have made on any of the accounts you hold with your Old Bank, including any account(s) that are not being switched under this Agreement."

Personally, I am too paranoid about how that information will be used. I apply the 'need to know' principle : they don't.

mjm3346

Caddyman wrote: »

Yup, that's about the crux of it, many people just cannot be bothered or just don't care.

Or are very satisfied with the level of service they receive and wouldn't want to risk receiving less for a one off couple of hundred quid (could even just be there is a conveniently located local branch and they are becoming quite rare these days)

Caddyman

mjm3346 wrote: »

Or are very satisfied with the level of service they receive and wouldn't want to risk receiving less for a one off couple of hundred quid (could even just be there is a conveniently located local branch and they are becoming quite rare these days)

That may be true for some, but for many, I'd wager it boils down to the fact as others have also said, they just can't be bothered.

As for bank branches, well yes, there are people out there who do still use bank branches, but clearly banks have decided that online banking is the future and have thus quite literally forced many people into online banking whether they like it or not. I personally haven't used a High Street bank branch for a single transaction for well over 6 years.

I appreciate not everyone has access to online banking or are not IT literate, but sadly they are the people that are being left behind. The bank switches I have done, have been done online, no human interaction involved. I've just opened another current account today online with a well known bank. I'll probably switch that account in 12 months time to another provider and make another fast buck. Some forum members on this site might well be well off enough to stick two fingers up to a couple of hundred quid, I just see it for what it is, free money.

Consumerist

eskbanker wrote: »

I believe it's recognised that stability and longevity of banking arrangements is usually seen as a positive by credit rating agencies but yes, if this was to be characterised as 'loyalty' then it's only in one direction because there's precious little evidence that banks recognise/reward long-time customers and indeed there are numerous incentives (such as switching offers or promotional interest deals) only available to new rather than existing customers!

I think this just means the banks and energy suppliers are looking for the mugs in life.

I think I must have got out the wrong side of bed today.

Eco_Miser

Shakin_Steve wrote: »

The switching ads which are appearing at the moment promise ‘average savings of £92 a year’. If we leave aside the switching bonus which, of course, is not mentioned, then surely most people are going to say ‘I can’t be bothered for less than 2 quid a week’?

In order to save £92 by a switch you must be paying at least £92 currently. I don't pay anything, for any of the many accounts I hold, so I don't see any need to switch. Open new accounts paying the best interest, yes; switch, no.

Caddyman

Eco_Miser wrote: »

In order to save £92 by a switch you must be paying at least £92 currently. I don't pay anything, for any of the many accounts I hold, so I don't see any need to switch. Open new accounts paying the best interest, yes; switch, no.

Best interest rates on current accounts? Well some of those best paying current accounts used to be quite good. Lloyds for instance on their Club account. Up until they slashed the 4 percent interest rate on balances up to 5k down to 2 percent. I was getting nearly £17 a month just in current account interest, but that has since dropped to just below £8.50 a month.

Out of the several accounts I do have, I pay for one packaged account through Nationwide B/S, currently £10 a month but soon to rise to £13 a month. We use the benefits though as we take 3 foreign holidays a year, so the holiday insurance part of the package makes it more than worth our while. However, the interest that I get from the balance in my N/W current account goes some way to offsetting the cost of the fee on the account, so in my view, that makes the packaged aspect of it even more appealing. We get breakdown cover on both of our vehicles too as well as mobile phone insurance included in the price.

I realise many may not want to switch their bank account, either because they are totally happy with the bank and account they have, or because they genuinely have zero appetite to do so, but as I stated in an earlier post, switching is no hassle. The bank you switch to depending on the deal at the time does the hard work and then gives you free money. Hardly a chore!

Certainly with my switch from M&S to TSB earlier this year, using a link from this site, TSB are giving me £180 over the year just for operating two direct debits, me paying £500 a month into the account, and for using my contactless card. At the end of the deal, I'll switch and hopefully get more free money from another bank. Similarly, when I switched from Halifax to M&S two years ago also using a link from this very site, M&S gave me £125 voucher, which I spent on clothing. This is all free money to me, absolutely no hassle involved.

Since May this year, I've personally bagged £512 of free cash just by switching banks, car insurer and telephone provider. I stand to earn even more free cash this year with more purchases using Topcashback. By the end of the financial year, I estimate that I'll have bagged enough free cash to pay for a cheap all inclusive to Cape Verde. The wife can pay for her own holiday!

colsten

7-day current account switching has always been a bit of a luxury solution looking for a problem. All the organisations participating in the scheme are much of a muchness, anyway.

It goes without saying that I have used the switching service, and would use it again, for joining offers that require its use.