Financial experts are issuing a stark warning to UK consumers: unwavering loyalty to your bank could be draining hundreds of pounds from your pocket each year. With the process of switching accounts now simpler than ever, millions are being urged to shop around for better deals.
The High Price of Banking Loyalty
A recent survey by Which? Money revealed a significant trend of customer inertia, finding that four in 10 current account holders have stayed with the same provider for over 20 years. Sam Richardson, Deputy Editor of Which? Money, suggests this loyalty often stems from a mistaken belief that all banks offer similar features and service quality.
"At first glance, a current account seems like the most basic banking product available," Richardson explained. "However, that couldn't be further from the truth - we found huge disparities between the best and worst performers, not just in terms of account features but customer service, too."
The solution, he advises, is to treat your bank account like any other service and compare it against competitors. The Current Account Switch Service (CASS) guarantees a seamless transition, moving all payments and direct debits to a new provider within seven working days.
Navigating a Competitive Market: From Digital to Gold
Peter Tyler, Director of Personal Finance at UK Finance, emphasised the competitiveness of the UK market, with banks and building societies offering a wide range of accounts. CASS has been pivotal in making switching both simple and secure, encouraging customers to consider factors like branch access, customer service ratings, and valuable perks.
These perks can include:
- Fee-free foreign spending
- Cashback on purchases
- High-interest savings tools
- Retail discounts and cinema tickets
Digital banks like Starling, Monzo, Chase, and First Direct continue to grow in popularity, often offering lower fees and superior app-based budgeting tools. Jasmine Birtles, founder of MoneyMagpie, notes their competitive currency exchange rates are a boon for frequent travellers.
For those preferring traditional services, Nationwide – named Which? Money’s banking brand of the year – combines a high-street presence with competitive features. Meanwhile, innovative alternatives like Tallymoney allow deposits to be held in gold, spending globally via a Mastercard without exchange rate fees.
"Given that gold rose in value by 65% in 2025, the small monthly account fee is hardly noticeable," Birtles commented, while cautioning that the fee would be more felt if gold prices fall.
Review All Accounts: Packaged Deals and Savings Rates
Sam Richardson also suggests consumers consider paid-for 'packaged' accounts, which bundle benefits like travel or gadget insurance. The key is to ensure you will use the perks and are not duplicating cover you already have elsewhere, for example through home or car insurance.
The review process should extend to savings accounts, especially following the Bank of England's base rate cut to 3.75%. Richardson warns that leaving money languishing in low-interest accounts can cost savers hundreds or even thousands over time. He advises checking digital banks and looking for temporary bonus rates to maximise returns.
In a highly competitive banking landscape, taking an active approach to managing your current and savings accounts is no longer a luxury but a necessity for financial wellbeing.
