Cash for Opening/Changing Bank Accounts

Magicmilo

Overall is this worth it ?

The hassle of changing bank account & teething problems with moving DDs.

I would have thought the biggest benefit would be on Banks being incentivised/forced to offer benefits to existing customers.

Can Martin answer if sufficient pressure is being put on banks to do this ?

subjecttocontract

If you are referring to switching bank accounts then usually there is no hassle, they are responsible for moving your direct debits for you.

eskbanker

I would have thought the biggest benefit would be on Banks being incentivised/forced to offer benefits to existing customers.

Can Martin answer if sufficient pressure is being put on banks to do this ?

You'd have to ask him - posting on here doesn't count!

However, banks are perfectly entitled to offer switching incentives without there being any obligation to offer similar to those not switching, so that's what they've been doing for the last 13 years and will continue to do…

wmb194

The government/FCA wants people to switch because it thinks that there isn't enough and it wants to foster competition. There's no chance they're going to bully the banks into not offering switching incentives.

subjecttocontract

Ive often wondered why most banks that offer hundreds of pounds in switching incentives make little or no effort to retain their customers. This results in serial switchers who keep switching until they have used up all those opportunities.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82105874#Comment_82105874

It's obviously way more expensive to incentivise the 99% of existing customers than the 1% of switchers, if similar bribes were to be offered - the concept of serial switchers is obviously well known around these parts but it's not representative of normal practice…

LITRG

Hi Magicmilo, one point to keep in mind on this topic is that the incentives paid for switching accounts are generally not taxable and so don't usually count towards the personal savings allowance. We have guidance about this on our website: Tax on savings income | Low Incomes Tax Reform Group

Section62

https://forums.moneysavingexpert.com/discussion/comment/82105906#Comment_82105906

but it's not representative of normal practice…

Judging by many of the comments on this BBC article today, switching banks is something to be avoided at all costs. The contrast with MSE is stark.

https://www.bbc.co.uk/news/articles/c5y3ex8ry82o#comments

(Note the image the BBC has used suggests we could get £100 for switching to Alliance & Leicester…)

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82105950#Comment_82105950

It's a pretty poor BBC piece and seems to be focused largely on recycling some HL analysis about savings rates, where they're pushing their Active Savings product and comparing its typical ~4% rate with the <1% available in many old easy access accounts, although to be fair, there is some content actually relating to CASS switches further down the story.

Reading the comments under articles like that isn't good for the blood pressure!

Alderbank

https://forums.moneysavingexpert.com/discussion/comment/82105950#Comment_82105950

Wow, that is a really old picture that Auntie has used!

A&L last offered £100 to switch in 2009 (so in house price terms, probably worth about £220 today). By 2011 Santander had removed all traces of A&L branding from its new acquisition.

subjecttocontract

https://forums.moneysavingexpert.com/discussion/comment/82105906#Comment_82105906

I wasnt thinking about just the switchers but also about them retaining all of their customers.

Santander have made some attempt to retain customers by their product offerings....e.g. 8% reg saver + 6% Edge savers. Co-Op have also made some attempt by drawing out their switch bonus over 3+ months & making it available to existing customers + offering a low cost packaged account.

BOS haven't made any effort as far as I can see, you can get their 8% reg saver without holding their c/account and some of the other banks think they can sell themselves on customer service alone.