banking

The Current Account Switch Guarantee

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A screenshot of the home page of the Current Account Switch Guarantee web site.

Until this year, I had never changed my bank account. I was still using the same account, with the same bank, that I opened when I was 18, shortly before starting university. But with the account no longer meeting my needs, and incentives to open a new account, I switched back in May, as mentioned last week.

Most UK banks are signed up to the Current Account Switch Guarantee, and this means that the switching process should be relatively painless. It’ll take about a week, during which your new account will be opened, everything moved across, and your old account is closed. You only have to interact with your ‘new’ bank – they take ownership of the process and will handle the closure of your old account for you.

What gets transferred

As part of the switch, the following will get moved across to your new account:

  • Any money in your account. You may also be able to switch if your account is overdrawn, but check your new bank’s terms and conditions.
  • All Direct Debit payments.
  • All Standing Orders.

Plus, any payments made into your old account will be automatically redirected to your new account. Payees should be notified of this and payroll systems may be able to update to your new bank account details automatically. When I logged into my employer’s payroll system to check my details, my new bank account number and sort code were already there.

What doesn’t get transferred

Basically, anything paid for using recurring card payments, or Open Banking, won’t get automatically transferred. When your old current account is closed, your old debit card will be deactivated and so any payments using this will fail. So any subscriptions that use recurring card payments will need to be amended to use your new card details.

Similarly, if you make payments using Open Banking (for example, to app-based savings accounts like Chip (referral link) or Zopa), these will need re-authorising using your new account.

Incentives for switching

Banks often offer incentives for switching your account – I got a low three figure sum as a reward for switching my account. MoneySavingExpert tracks the current deals on offer – £175 seems to be the going rate, but such incentives come and go. Also, I was able to get a little bit more by initiating the switch using Quidco (referral link), which gave me around £10 cashback in addition to the switching incentive.

Just be aware that whilst almost all banks are signed up to the Current Account Switch Guarantee, not all of them are. If they aren’t, then you may have to manually switch over your payments, which is a major disincentive to switch.

Frustratingly, paper bank statements are still a necessity

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Earlier in the year, I changed my current account to a new provider. I’ll probably talk about the process in another blog post another time, but when it came to choosing a new bank, I decided to stick with a bank that still has high street branches.

When we moved to Sowerby Bridge in 2010, there were still two banks left in the town. HSBC and Yorkshire Bank had recently upped sticks, but Halifax and (the then) Lloyds TSB were still there. But Lloyds left a few years ago, and then Halifax shut up shop more recently.

Now Sowerby Bridge essentially flows into Halifax (the town), and most high street banks still have branches there. This includes Halifax (the bank) – indeed it wasn’t long ago that there were two branches, including the original branch of what was then the Halifax Permanent Building Society. That’s now gone, but there’s still one branch remaining. Barclay’s have also closed their branch, but we get a van for ten hours a week instead. But, on the whole, Haligonians and those living nearby are still reasonably well-served by banks.

Banking hubs

That’s not true for some other places. Elsewhere in West Yorkshire, the towns of Ossett and Normanton are now the home of ‘banking hubs’, run by the Post Office to provide banking services where no other banks remain. Almost all UK banks are signed up, and allow customers to pay in cash and cheques, and withdraw cash. Representatives from the main banks then visit at a set time every week for more complicated queries. It’s better than nothing, but many banking hubs lack printers for printing off paper bank statements.

And that’s a problem. For the most part, I’m happy to go paperless with my accounts, including my current account. But there are times when a paper bank statement is a necessity. When we re-mortgaged the house a couple of years ago, we needed paper bank statements that were certified by a solicitor. And if you need a DBS check, to work with young or vulnerable people, then you have to provide paper documents. Simply printing a PDF statement from your online banking app isn’t sufficient – it has to be a proper paper document. Bank branches can provide paper statements and put an official stamp on them where needed.

As much as online-only banks like Starling, Chase and Monzo regularly top customer service charts, they don’t make it easy to request paper statements. You normally have to contact their customer service team and wait for them to be sent through the post.

Now, this is arguably a problem for DBS and solicitors, rather than the banks themselves. For example, the DBS doesn’t support the government’s own GOV.UK ID check app. And I’m sure that the banking industry could work with organisations like the DBS to develop a way of sharing identity without relying on paper documents, a bit like how drivers can share their driving license details using a share code. But until something like this happens, I’ll be sticking with a mainstream bank.

Speaking of cheques: sure, you can scan cheques using most banking apps, but I’ve had this fail on more than one occasion. Indeed, one cheque that was rejected was issued by my own bank. Admittedly that was a few years ago and technology has moved on a bit, but I’d want to be able to take my cheque somewhere to pay it into my account – especially if it was for a large amount.