The latest report from the Competition and Markets Authority (CMA) has revealed that customers could save an average of £70 a year by switching current accounts, and those who regularly dip into their overdraft could save even more (up to £260 a year!). So, could it be time to reconsider your options?
The CMA investigation found that banks don't have to work hard enough to compete for customers, as those customers simply aren't willing to switch. This low level of engagement means that banks aren't compelled to offer competitive products, while new banks are finding it hard to gain a foothold and attract customers, so the market still needs improvement.
The figures highlight the extent of apathy among consumer: 57% have stayed with their current account provider for more than 10 years, and 37% have been loyal for more than 20 years. Much of this could be due to the perceived difficulty of switching, not to mention the confusing information that's presented – the report noted that customers are often "faced with complex overdraft charges and limited information on product and service quality", which can make it difficult for them to know what they're paying and to compare accounts.
Despite the Current Account Switching Service being launched two years ago – which has made the process easier by guaranteeing a successful switch within seven working days – awareness and confidence in it remains low. In fact, only 3% of customers switched accounts in 2014, and just 16% considered the alternatives. Overdraft users are even less likely to switch accounts than other users, but given the potential savings that can be made, it could be time for them to take the plunge.
In order to address the issues, the CMA has set out a number of measures that could increase competition and secure a better deal for customers. These include requiring banks to prompt customers to review the service they receive at certain 'trigger points', such as a loss of service or unarranged overdraft charges; making it easier for customers to compare products by upgrading the industry tool Midata (which gives consumers easy access to their banking history), something that "could have a radical impact on consumer choice in retail banking markets"; and requiring banks to help raise awareness of, and confidence in, switching bank accounts.
The proposals will be tested and developed over the coming months, it said in the report, but why wait? Being proactive and comparing the options could ensure you get a better deal right now, and it couldn't be easier to get started. Check out our comparison tool and banking best buys to find the best current account for you – whether you want to get a better overdraft rate or are hoping to earn interest on your balance with a high interest current account, you could find the deal to suit, and with the Current Account Switch Service in full swing, there's no reason not to give it a go.
The potential savings could be well worth it – even more so if you can earn interest – and you could even get a better service, too. So, if you're not happy with your current account provider, don't let apathy or perceived loyalty get in the way: compare accounts and switch!
Use our banking search tool to get started
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.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.