Current accounts – figure it out

Published: Saturday 4th April 2015 by The News Editor

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Current account holders can find out in pounds and pence exactly how much better off they would be by switching elsewhere.

If you’ve ever wondered just how much better off you could be by moving your current account elsewhere, now you can find a very exact answer.

A new Government-backed current account comparison service has just launched which can tell people in pounds and pence how much they could gain by shifting to another bank or building society. Based on how you use your current account, the free tool will make more than 1,500 calculations and compare all of the current accounts on the market.

It will then come up with a table, ranking the deals which could earn or save you the most cash. You’ll also be able to see how your own current account measures up when compared with what else is on offer.

The tool, which is available on the website, has initially been made available to customers of the major current account providers – Barclays, HSBC, Lloyds, RBS, Santander and Nationwide. More providers are expected to come on board.

In order to get a tailored current account comparison, you’ll need to go to your own online banking and download 12 months’ worth of your bank statements onto a file, which can then be uploaded on GoCompare’s website.

The thought of uploading your banking history onto a comparison website might make some people feel a bit nervous, but those behind the initiative say personal information will be protected. The file won’t contain the customer’s name, address, sort code or full account number and information within certain transactions will also have been blanked out by the current account provider. GoCompare says it won’t be able to read the data, which will be purged at the end of the process.

The move is part of a Government drive called midata, to give people more access and control over the personal information that is held about them so that they can use it to help them shop around for the best deals.

So why has this been introduced?

In autumn 2013, the process of current account switching was made easier. The length of time it took to switch was reduced from up to 30 working days previously to seven. Payments made to the old account are automatically transferred to the new one and the customer is guaranteed not to be left out of pocket if anything goes wrong.

Around 1.6 million people have changed current account since the seven-day switch scheme was launched.

But while it has become easier to switch, it hasn’t, up until now, necessarily become easier for people to work out who they should be switching to. The different way in which current account providers impose charges for facilities such as overdrafts, the different rates of interest on balances, with many accounts offering no interest at all, and the range of perks such as cash incentives make it hard for people to work out exactly which deal would best suit their needs.

The move could help to widen the choice for consumers by helping smaller, challenger banks gain a foothold in the current account market. Lloyds, Barclays, RBS and HSBC alone represented more than 77% of the current account market in December 2013.

Will the scheme make a difference?

Consumer group Which? believes the service could help people save money, but says more current account providers need to come on board.

Richard Lloyd, executive director of Which? says: “In the past, it’s been almost impossible for people to work out if they have the right bank account. The midata initiative will allow people to compare accounts based on their needs and could help them save money if they switch.

“However, it will only be a success if the banks play their part in making people aware of the service and the benefits of switching, and if it’s rolled out across all current account providers.”

How many people are still supporting family members as they approach retirement?

More than one in three (36%) people planning to retire this year are providing financial support to family members, increasing the pressure on future retirement incomes, according to new research by Prudential.

People retiring this year who support their family financially pay out nearly £250 a month or almost £3,000 over the course of a year on average. Nearly one in eight (12%) are paying more than £500 a month to support family members.

The money being provided by retirees to their dependants is most likely to be used for everyday living costs, with 11% giving money on a regular basis to cover essentials such as food or travel.

Copyright Press Association 2015

Published: Saturday 4th April 2015 by The News Editor

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