Steep rise in the number of people switching bank accounts

More consumers are switching their current bank accounts as they vote with their feet and look for better returns and improved customer service.

There was a rise of 20% in the number of switches to bank accounts completed during the first three months of the year compared with the last quarter of 2015 – and a rise of 10% in the same period last year.

March saw the highest number of switches since the Current Account Switch Service was launched in 2013. There were nearly 125,000 switches during the month, out of a total of nearly 310,000 during the first quarter of the year, according to Bacs, the industry body responsible for the service.

The past year has seen just over a million customers switch accounts, meaning there have been 2.8 million such actions since the service began.

Kevin Mountford, of Moneysupermarket, said: “The latest current account switching figures are very encouraging and it’s great to see both a 20% increase since the last quarter’s figures as well as a 10% annual uplift.

“But while the increase in figures is positive news, the number of switches is still comparatively small, given there are 65 million active current account holders in the UK.

“Banks and building societies, therefore, have a good opportunity to capitalise on these people and should continue to create innovative products that create consumer excitement and encourage switching, especially as it’s only a handful of providers that are making net gains from switching activity at the moment.

“At the same time, consumers should continue to put pressure on banks by switching provider if they aren’t happy with their current deal.”

He added: “On average, people save £70 a year by switching and there are plenty of enticing deals currently on the market, offering high-interest rates, cash incentives, and other perks, so it’s well worth shopping around as there may be a better offer elsewhere.”