The Independent Commission on Banking produced a report back in 2011 that recommended easier account switching as a way of promoting competition between banks. As of Monday, the industry is promising it will take just seven working days to transfer bank accounts, which is a vast improvement on past figures, which suggested it took as long as 30 days to transfer a current account.According to the Payments Council, last year about two million people moved their accounts. The industry is now questioning how many people will switch their accounts as a direct result of the changes. Craig Donaldson, the chief executive of Metro Bank, said “To change the face of British banking, we need to make seven-day switching work.“But we also need to create more choice for people.”
Virgin Money and Tesco are expected to enter the market with new current accounts next year, which will provide greater choice for the consumer. However, without good reasons to switch, it is believed that many people will remain reluctant to move their accounts. Mark Fiander from the Money Advice Service said that “It is definitely worth switching,”
and those who use a bank overdraft frequently could be amongst the biggest gainers. “It’s not uncommon to save £500 or £600 by switching your bank. Now whether that’s because you’re not paying fees or charges, or equally if you’re not getting interest that’s sitting in your current account, it can really add up,”
he added.The Money Advice Service is also keen to encourage people to switch and is launching a comparison tool on Monday to help people decide which bank would provide the best value for them.The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.Setfords Solicitors are a national full service law firm, with tax law solicitors in Milton Keynes and across the country.