Jo Why Lee

London - United Kingdom

    The UK's Bank Account Switching Service

    September 17, 2013

    Money - Bank Accounts

    A service has now been launched in the United Kingdom which helps consumers switch their current account in only 7 days.

    It  has been found that many people are incredibly loyal to their bank accounts sticking with them for an average of 17 years, despite any customer service problems or banking issues one might have with their bank, chances are they just choose not to switch. In Scotland consumers are the most loyal with the average consumer remaining with the same bank for 19 years.

    The resistance to switching current accounts to a new bank is generally because of the perceived complications . Just imagine what type of disaster would roll out if a series of direct debits were missed because they were debited from the wrong account during the process of the switch.

    Now, thanks to the new government switching service from the Payments Council you can switch your current account to a new bank without any hassle or any potential charges from missed payments caused by the switch. You simply choose the bank you would like to switch to and the date to make the switch. Then you leave the bank to transfer over all of your direct debits and existing payment arrangements such as your salary from your old account. On top of this any payments made to the account after the seven day switching period will be redirect to the new account.

    If any problems occur you simply need to contact your new bank, rather than be pushed back and forwards between the two. If you are charged due to any missed payments and so on or missed interest payments these will simply be refunded to you. The whole service makes the process unquestionably easy.

    This completely free service has been introduced in order to help encourage consumers move banks with ease if they are unhappy with the service that they have been receiving.  As a result it is thought that increased current account portability will increase the level of competition between banks, removing any complacency and as a result the consumers will benefit from receiving a better deal! Examples of this are incentives from some banks such as Halifax. If you move to the Halifax you will get a £100 bonus upon your switch! This will, in most cases be worth more than several years of interest on the average current account balance but it is important to weigh up everything an account offers such as access to your account, interest rates, overdrafts and charges before choosing your new account.

    The lack of switching bank accounts also holds true when it comes to mortgages with a large proportion of consumers remaining with their mortgage through the term of their borrowing. That for many means 25 years with the same bank. Refusing to consider switching mortgage advisors will prevent you from taking advantage of great deals which are available elsewhere, especially when mortgage brokers can  get you access to exclusive deals. Just like switching your car insurance and choosing the better deal you should regularly check you are getting the best deal from financial commitments, especially one as important, expensive and long term like your mortgage. A mortgage advisor can act like the Payments Council Switching Service and help you remortgage your property so you get a better deal, whether this is lower monthly repayments, a shorter term or cheaper overall deal without any effort from yourself!

    Only time will tell whether the bond between the consumer and their bank will be broken, it will definitely be an interesting space to watch, both as an outside and as a consumer with no doubt many incentives and better packages available from current account products.

    Related Links:

    Payments Council - Switching Service

    First Mortgage - Free Mortgage Advice

    £100 bonus to switch to Halifax  

    Isabelle Choen is a property and finance blogger located in the UK, keeping on top of the latest personal finance developments. 

    Read Jo's other blog entries >

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