More people are switching current accounts – but what do the figures mean?

Experts disagree about the 7% increase over the past year

Switching to a better bank account is much easier than it used to be (Getty Images)

More than a million people have switched current accounts in the past year. Figures published by the Payments Council show that between April 2014 and March 2015 there were 1.14 million switches, up from 1.06 million switches in the previous 12 months.

Does that 7% rise in the number if switchers mean that people are getting wise to the fact that it not only pays to switch to a better bank account, but it’s also much easier than it used to be with guaranteed seven-day switching offered? Experts disagree about what can be read into the figures.

David Mann, head of money at uSwitch, said: “Two things were key in making the seven day switch really work – boosting confidence in the switching service and ensuring the market was competitive enough to make switching worth it. These figures show that confidence is up, which is half the battle.

“But in recent months we’ve also seen the market heat up. As well as switching incentives of up to £150, current accounts are becoming increasingly attractive thanks to high interest rates and monthly cash rewards.”

Recently Barclays made a U-turn and introduced a reward scheme following highly competitive cashback offers from Halifax and Santander. High interest paying accounts, such as those from Nationwide and Lloyds, are also leading to people switching their current account in order to make their savings work harder, Mr Mann pointed out.

But Andrew Hagger of MoneyComms pointed out that most people are still choosing to remain with their existing bank. “The figures show that although more people are voting with their feet and looking for a more suitable banking relationship, the vast majority are refusing to budge from their existing provider despite the array of enticing upfront cash incentives on offer.”

Analysis of the figures show that Santander and Halifax remain the most popular banks to switch to gaining 170,551 and 156,639 extra accounts from their rivals respectively. At the other end of the table Barclays lost 83,296 customers, NatWest 69,181, and Co-op bank 51,180.

“That perhaps partly explains why Co-op and Barclays have just announced moves to increase the appeal of their accounts,” said Mr Hagger.

He believes that until accounts become easier to compare, few people will switch. “The confusing array of different tariffs on offer for credit interest, cashback, rewards and overdraft charges means the current account market remains a minefield for customers looking to find the most appropriate deal,” he said.