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Current account inertia costs consumers

Current account inertia costs consumers

Category: Banking

Updated: 14/12/2012
First Published: 13/09/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Hassle and apathy are the main reasons why more than a third of Brits have never switched their main current account provider, new research has revealed.

Despite the impact of the recession, and three quarters of people making changes to their lifestyle to save money, Norwich and Peterborough Building Society (N&P) said only one in ten people have changed their main current account in the last 12 months.

The research also found that nearly two thirds of people are not even looking to review their current account within the next 12 months.

Poor customer service, or a single bad experience, are the most likely reasons people look to switch their current account.

Yet almost four in 10 people said that changing their main current account would be too much hassle, and were put off by filling out forms and providing the necessary documents, even though the paperwork involved is usually minimal.

Almost one in five people are mistakenly of the view that all current accounts are the same – different accounts can have different charges, offer different incentives and provide different services.

The survey comes hot on the heels of the Independent Commission on Banking's recommendation that the account switching process should be improved.

If the proposals get the go-ahead, bank customers could soon find it far easier to switch bank accounts.

Under the new system, all credits and debits going to a customer's old account, including automated payments on debit cards and direct debits, would be caught and automatically transferred to the new account.

"Millions of people in the UK are not prepared to change their main current account because they think it would be too much hassle, they are concerned that problems will arise with direct debits or standing orders, or they simply think that all current accounts are the same," said Ewan Edwards, head of retail products at N&P.

"It has never been easier to switch current accounts and in the current economic environment where many people are feeling the pinch, it could make them some important savings."

The research showed that Edinburgh is the switching capital of Britain , with eight in 10 people having switched current account providers at least once.

Bristol has the lowest rate of switching with four in 10 people being with the same current account provider all their life.

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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