Drop in number of customers switching accounts

Just over one million current account customers switched to a new provider last year - marking an 11% fall compared with 2014, according to new figures.
By The Newsroom
Published 21st Jan 2016, 06:00 BST
Santander is a winner, RBS and NatWest lost current account holdersSantander is a winner, RBS and NatWest lost current account holders
Santander is a winner, RBS and NatWest lost current account holders

Some 1.03 million current accounts were switched during 2015, down from 1.15 million switches taking place in 2014, according to Bacs.

Figures published voluntarily by current account providers also showed that Santander, Halifax, Nationwide Building Society and Tesco Bank made net gains between April and June 2015 in customers switching using the current account switching service, while Barclays, NatWest, RBS and Lloyds Bank lost customers.

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Santander, which has raised the fee on its flagship 123 current account, was by far the biggest “winner” - making a net gain of more than 66,000 customers between April and June.

Earlier this month, Santander increased the monthly fee for its 123 current account, which pays 3% interest as well as cashback, from £2 to £5.

Halifax offers customers £100 to switch as well as a potential £5-a-month reward. Tesco Bank offers clubcard points and 3% interest on balances up to £3,000 and Nationwide customers can get 5% interest on balances of up to £2,500 for the first year. Richard Neudegg, head of regulation at uSwitch.com, said of the 11% fall in switching: “Despite 2015 seeing some of the best financial incentives for switchers, many still struggle to see the value in switching.

“The banks need to up their game and do more to help their customers understand their current account usage by prompting them with clear information.”

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But a spokesman for Bacs suggested the figures could also be a reflection of providers doing more to encourage customers to stick with them rather than switch.

He said: “The number of switches we see is largely influenced by the activity of individual banks and building societies - and that includes not just incentives to switch but also incentives to remain with the existing banking provider, as they work to retain their customers in an increasingly competitive marketplace.

While RBS and NatWest lost almost 32,000 between them, RBS-owned Ulster Bank shed 1,428 followed by Allied irish on 771, Danske, 683 and Bank of Ireland, 535.

Related topics:SantanderUlster BankHalifax