Switching bank accounts isn’t necessarily something you think about regularly, but it could be a good way to save money and manage your finances better.
But according to a recent survey by KPMG, less than one in five UK adults (17%) have switched their bank account in the past year.
And surprisingly, nearly a quarter (24%) say they never plan to switch at all.
But these headline figures disguise an interesting trend: younger adults are much more likely to take the plunge and move their money to a new bank.
Young adults embrace challenge banks and technology
Nearly half (45%) of 18 to 24-year-olds were found to have switched their bank accounts in the past year.
That compares with just four per cent of people aged 65 or above.
This could be partly because younger adults are happier to embrace new entrants into the financial services market, such as Monzo and Starling.
In fact, almost half (49%) of over-65s said that nothing could convince them to move their main bank account away from a traditional high street bank.
At the same time, younger people may also be happier to take advantage of digital innovations, such as app-based banking that gives users spending insights and instant notifications.
Banks need to promote the benefits of switching
Switching to a new account can offer many advantages, such as cash incentives, competitive interest rates, and possibly better customer service.
So should financial institutions do more to tell people the benefits of switching and how easy it can be to make the move?
Peter Rothwell, head of banking at KPMG UK, certainly believes so, especially when it comes to older adults.
“To entice this older demographic when it comes to switching, lenders must focus on raising awareness of the ease and the perks of the switching process, particularly when it comes to money-saving features that could help address cost-of-living challenges,” he said.
What is the Current Account Switch Service?
If you’re not sure about switching, the Current Account Switch Service (CASS) aims to make the process straightforward and stress-free.
Here’s how it works:
Free and simple: CASS allows you to move your current account from one participating bank or building society to another without hassle.
Automatic transfers: All your incoming and outgoing payments are moved to your new account automatically.
Balance transfers: Any remaining funds in your old account are transferred to the new one, and the old account is closed for you.
Safety net: Payments accidentally sent to your old account are redirected to your new one.
Switch Guarantee: You’re protected against financial losses if something goes wrong during the process.
So far, over 11 million current accounts have been switched using CASS, and more than 50 banks and building societies are part of the service.
If you’re unhappy with your current bank or simply curious about what else is out there, then why not explore your options?
It may be that you can get a better deal elsewhere, but you won’t know unless you look.
Written by James Glynn
Senior Financial Content Writer
