Number of people switching bank accounts declines by 5% despite big incentives

The number of people in the UK switching to another bank account has fallen over the past 12 months, despite incentives from lenders and the UK financial regulators to encourage consumers to do so, a report published today (20 July) shows.

Some 1.05 million people changed their current accounts provider last year, according to payment body Bacs, which operates the service. The figure represents a 4.7% decline compared with the previous 12 months and comes as a surprise given the campaign run by the Financial Market Authority to encourage customers to switch to a different lender.

Britain's financial regulator has told consumers they could save up to £116 ($152, €138) a year if they switched their bank accounts.

"With 65 million current account holders in the UK, movement is minimal," said Hannah Maundrell, editor of money.co.uk.

"Even with big cash incentives on the table, people just aren't switching."

Marks & Spencer offered up to £220 worth of incentives, while the Co-Op and Halifax offered £150 and £125 respectively to new account holders. The latter proved to be most popular new bank among those who switched, gaining just under 32,000 customers last year compared with the 26,000 attracted by Nationwide and the 9,600 that moved to TSB.

Barclays was the biggest loser, with 31,000 customers leaving the lender in the last 12 months. NatWest lost just under 14,000 current account holders, while Royal Bank of Scotland and Lloyds both saw 11,000 customers moving to another lender.

The number of people switching to a new account over the past six months was, however, 4% higher year-on-year, Bacs added.