My Bank Account and Me

Transcription

1 My Bank Account and Me

2 My Bank Account and Me Report 2 Adrian Kamellard Chief Executive Payments Council About the research The My Bank Account and Me research is authored by the Payments Council. It is based on a Populus survey of 2,055 UK adults online between 17 and 19 July Results have been weighted to be representative of all UK adults. Current accounts are a constant and a necessity in a life of fast-paced change and increasing choice. We need them to work efficiently and effectively 24/7 wherever we are; safe in the knowledge that we can access our money any time we need to. Having the right relationship with our bank or building society through our initial interaction with our current account can also bring advantages as we reach important moments and life stages- first jobs, marriage, new homes and new arrivals. The right choice of current account is therefore an important decision but it is also important as our needs and life stages change we can change them if and when we need or want to. This report draws on consumer research and paints a picture of a country broadly content with its bank and building society accounts. A country where a large number of people will, for whatever reason, stick with one current account for a long period of time and pass on their choice of provider to their children. However, the report also conveys a desire for change. A large number of people are open to the thought of change and switching their current account but just think it will be too difficult or involve too much hassle to do so. Others struggle to differentiate between banks and building societies and therefore are apathetic towards making a switch. This is what the introduction of the Current Account Switch Service aims to address. From the 16th September 2013 virtually all of the active current account marketplace will deliver the new switching service, making it simpler, more reliable and hassle-free to switch your personal current account in seven working days. Banks and building societies, established and new, will now have equal opportunities and incentives to both retain and win customers, thereby considerably opening up the market to more competition and more choice for consumers. This report offers a snapshot of a country currently stuck to its current accounts, we look forward to following the progress of a new service helping Britons make a new switch. Adrian Kamellard Chief Executive, Payments Council

3 KEEPING IT IN THE FAMILY 3 27% In the UK more than a quarter (27%) of us use the same current account provider as one or both of our parents. This is a staggeringly high figure and suggests that nurture has a significant influence over our early banking choices. Our parents appear to have a strong and often lasting effect on which bank or building society we use. In particular our parents have a strong influence when we first enter the market; 59% of year olds use the same bank or building society as one or both of their parents. And even amongst those over 65, whose childhood days are long since passed, over one in ten (12%) still use the same bank or building society as one or both of their parents do or did. has particularly strong family ties when it comes to banking with a third (33%) of Scots using the same bank or building society as one or both of their parents. They are also the most likely to still be using their first bank account with over a quarter (26%) still primarily using their original accounts. Those in Yorkshire are the least likely to be influenced by their families with only one in five (20%) still using the same bank or building society as one or both of their parents. In the UK more than a quarter (27%) of us use the same current account provider as one or both of our parents.

4 I M MADE OUT OF GLUE 4 The research reveals that our relationships with our current accounts are long-lived and cemented at a young age: 17 years 11 years 6 months o At an average of 17 years, our relationship with our current account provider is longer than the average British marriage, which lasts a mere 11 years and six months o Many seem to make decisions young and stick with them. The average age for someone opening the current account they use now is 29 years old o Over a fifth (22%) of us are still using the first current account we ever opened Among older generations there is a strong sense of loyalty and continuity when it comes to our current accounts: o Nearly a quarter (24%) of over 65s use a bank account they opened aged 24 or younger, this rises to 37% when we look at the age group o 16% of over 65s are even still using their first bank account! If they had opened this account at 18 years of age, even the youngest of them would have opened them in or before 1966 o On average over 65s have been with their current account provider for 28 years or in other words they opened it in 1985, the year when the first mobile phone call in the UK was made by Ernie Wise Again is the most loyal region in the UK: o Scots are the most likely to still be using their first bank account (26%) o Scots also have the longest average relationships with their banks or building societies; currently standing at nearly 19 years ers and those in the are the least faithful: o The average number of years people tend to stick with their main current account is lowest in at 13 years o Those in the are the least likely to still be using their first bank account with just 11% doing so At an average of 17 years, our relationship with our current account provider is longer than the average British marriage, which lasts a mere 11 years and six months 1 1 Office for National Statistics - Divorces in England and, 2011 HYPERLINK html \l tab-duration-of-marriage

5 MODERN BANKERS 5 As you might expect, the research reveals that the way we interact with our bank account is changing. There is a marked difference in the way that younger and older respondents approach their accounts. Online banking is now supreme with over three quarters of us (78%) predominantly checking our balances online, mainly using our PCs (68%) but with 8% using mobile phones. Mobile phone use is significantly higher amongst younger users with 21% of year olds and 17% of year olds using mobiles as their primary means of checking their balance. When it comes to checking our account balances many of us are also prolific 18% of people check it at least one a day and three-quarters (77%) check it at least once a week. Only 1% of us put our heads in the sand and never check what is happening with our accounts. Overall, almost two-thirds (64%) of respondents only have one current account, emphasising the extent to which we rely on them. However, intriguingly, 38% of year olds and 42% of year olds have two or more current accounts open at any one time. The third (36%) of us who have more than one bank account tend to use them in a fairly pragmatic and considered manner. Many still use it for specific tasks (42%), or to benefit from the additional services it offers (21%). Interestingly though 32% keep another account open as a security measure and backup if something happens with their main current account. Almost a third (29%) of respondents main current account is a joint account. This increases to 43% for year olds compared to 20% for year olds. 78% online 22% other Online banking is now supreme 78% predominantly check our balances online, 68% using PCs, 8% using mobile phones

6 SWITCHAHOLICS 6 Overall the research outlines that switching current accounts for a better, or different, deal is not something we are averse to and there is an evident willingness to switch from provider to provider across a wide number of other areas of our lives. Over two thirds (68%) of those we questioned had changed at least one of their financial services or utilities providers in the last two years. However, switching our bank accounts is not something that we do regularly. o Only 6% have switched their bank account in the past 2 years compared to the 37% who have switched car insurance provider and the 30% who have switched home insurance provider o In the longer term the majority of us have not switched either nearly three-quarters (74%) of us have had our current account more than 5 years, and 55% of us have had ours for over 10 years o Interestingly younger people tend to have greater switchaholic tendencies with 8% of year olds and 10% of year olds having switched bank accounts in the last 2 years, compared to just 3% of over 65 year olds 37% 6% 30% Only 6% have switched their bank account in the past 2 years compared to the 37% who have switched car insurance provider and the 30% who have switched home insurance provider

7 SAVVY SWITCHERS 7 ers are the savviest when it comes to switching bank or building society but overall are the UK s worst switchers. Only just over half (57%) have switched one of the listed utilities and financial services in the past 2 years, significantly fewer than the national average of 68% and the savviest switchers 2 in the (75%). ers are particularly unwilling to switch utility providers with only 18% switching either electricity or gas providers - compared to national averages of 25% and 21% respectively. Financially ers appear to be the savviest however with 14% swapping a savings account compared to the national average of 10% and 9% switching their main bank account compared to the national average of 6% - both the highest of any of the regions. 2 Savvy switchers are defined as those who have changed at least one of the following in the last two years: Car Insurance Provider; Home Insurance Provider; Electricity Provider; Gas Provider; Broadband Provider; Travel Insurance Provider; Savings Account Provider; Satellite/ Cable Television Provider; Main Bank Account Provider; Water Provider Those in the - are the savviest switchers with three-quarters having switched something in the last 2 years. erners were particularly good at switching their home and travel insurance with 38% switching the former compared to the national average of 30% and 21% the later compared to 13% national average. Older people also seem to be much savvier switchers than younger people the numbers consistently rise with age. Over three quarters (77%) of over 65s having switched in the last 2 years compared to only 52% of 18-24s and an overall average of 68%. Over 65s are particularly good switchers when it comes to car and home insurance (46% vs. 37% national average and 42% vs. 30% national average). Youngsters only out-switch their elders when it comes to electronics with 25% of year olds switching broadband (vs. 14% of over 65s) and 11% satellite or cable (vs. 5% of over 65s). Older people also seem to be much savvier switchers than younger people One thing certain to be holding people back from switching is our lengthy to-do list of tasks; earlier research carried out by the Payments Council found that 21% of us just don t know where to start with our lists and almost 33% of us claim there is just not enough time in the day to get on top of everything. Financial planning is the thing we are putting off the most. While immediate and pressing items such as paying off credit card bills ranks in nearly 1 in 10 (9%) of our top items to tackle, longer term planning is being left for another day.

8 BANK SWITCHERS 8 Despite this, today s research reveals that switching bank accounts is something we are open to with 43% of respondents indicating that they would consider it. o Younger and middle-aged respondents are the most enthusiastic towards switching 53% of year olds and 49% of year olds indicated they were open to switching o Those open to switching cite a better deal as the overwhelming attraction if they were to switch with (70%) o Out of those not so eager to switch, nearly a quarter (22%) did not want to do so because they think it will be a hassle and nearly one-in-five (18%) think it will be difficult to change their direct debits The research also reveals the motivations of those who have switched with over a quarter citing poor service at their previous bank or building society (27%) as the main reason for why they switched. Whilst 26% highlighted incentives from their new provider, interestingly 10% switched because they wanted a bank or building society with a better reputation and ethics. 43% 43% indicated that they would consider switching bank account 43% of respondents would consider switching current account

9 Switchers in the last two years* ern ern 1 75% 2 South 74% 2 74% 4 73% 5 ern 72% 6 71% 7 70% 7 ern 70% 9 South 66% 10 65% 11 64% 12 57% South South * Percentage who have switched their provider of one of the following in the last two years: Car Insurance; Home Insurance; Electricity; Gas; Broadband; Travel Insurance; Savings Account; Satellite/ Cable Television; Main Bank Account; Water.

10 70% Joint 7th in the UK ern 7% account in last 2 years 19years ern 33% or both of their parents 6th car insurance in the UK South South

11 75% 1st in the UK ern 3% account in last 2 years 16years ern 20% or both of their parents 1st home insurance in the UK South South

12 71% 6th in the UK ern 7% account in last 2 years 15years ern 27% or both of their parents Joint2nd broadband in the UK South South

13 65% 10th in the UK ern 7% account in last 2 years 17years ern 20% or both of their parents 2nd gas provider in the UK South South

14 73% 4th in the UK ern 5% account in last 2 years 17years ern 29% or both of their parents 1st car insurance in the UK South South

15 74% Joint 2nd in the UK ern 8% account in last 2 years 18years ern 27% or both of their parents 1st satellite/cable in the UK South South

16 64% 11th in the UK ern 5% account in last 2 years 18years ern 27% or both of their parents 3rd car insurance in the UK South South

17 ern 70% Joint 7th in the UK ern 7% account in last 2 years 19years ern 27% or both of their parents 2nd home insurance in the UK South South

18 57% 12th in the UK ern ern 9% account in last 2 years 31% 1st 13years or both of their parents savings account in the UK South South

19 South 66% 9th in the UK ern 5% account in last 2 years 19years ern 24% or both of their parents Joint2nd water provider in the UK South South

20 South 74% Joint 2nd in the UK ern 7% account in last 2 years 19years ern 22% or both of their parents 1st broadband in the UK South South

21 ern 72% 5th in the UK ern ern 5% account in last 2 years 31% 1st 14years or both of their parents electricity provider in the UK South South