Brits Can Switch Banks In A Week From Next Month
Virtually all banks and building societies have agreed to slash the time needed to transfer current accounts between providers from next month, it has been confirmed.
Customers will be able to move their accounts within seven days, drastically cutting the current 30-day period.
The Payments Council confirmed the launch date of September 16, in a scheme expected to increase competition for providers and better deals for customers.
Some 33 bank and building society brands accounting for almost all current accounts in the marketplace have signed up to the agreement.
The streamlined switching service also includes facilities for all outgoing and incoming payments to be moved over to a customer's new current account, with payments made accidentally to the old account automatically redirected for 13 months after the switch.
Consumers will be refunded interest and charges if anything goes wrong.
Adrian Kamellard, chief executive of the Payments Council, said: "As final preparations are made for launch we look forward to a new era of account switching which will lead to greater choice for customers and wider competition in the marketplace."
The Payments Council confirmed that the new switching guarantee does require that the old current account must be closed as part of the changeover.
Current account providers will display details of the new guarantee in branches and on their websites.
Rachel Springall, spokeswoman for financial information website Moneyfacts, said: "With only one month to go, we have already seen banks launch some incentives to entice new customers."
The extent to which the new rules will spur more people into action is not yet clear, but recent evidence has indicated that consumers have been getting more fed up with their current account providers.
The financial ombudsman recently reported that complaints about current accounts had rocketed by more than a third over the last year, following two years of falls.
Ms Springall said people considering making the jump to another provider should bear overall benefits in mind rather than initial perks.
She said: "Once an institution has you as a current account customer it is usually for the foreseeable future, so they are likely to offer you other products such as cards, loans and mortgages while you have a relationship with them.
"Assessing what you need from a current account on outset is vital."