The original piece of research dates from 2013, when the average marriage lasted 11 years and 6 months, whereas we stayed with a bank for an average of 17 years.
More recent statistics showed that the number of people who switch bank accounts is rising – up 6 per cent in the year to June 2018 to almost one million, according to the UK’s Current Account Switch Service.
Yet there are around 70 million current accounts in the UK, so the level of switching is still low – compared to, for example, the almost 6 million people (1 in 5) who switched electricity provider in 2018.
This article appears in Talking Money - a special report and content series from The Scotsman in association with Womble Bond Dickinson
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Claer Barrett, editor of FT Money, was shocked at the lack of customers leaving TSB in the immediate aftermath of its IT meltdown in 2018. In its first quarterly figures published after the crisis, TSB said it had only lost a net 6,000 accounts out of more than 5 million.
So why are we more likely to be wedded to our bank than our partner? Some worry about the hassle of changing all their direct debits and mistakenly believe the process is complex and difficult – when 99 per cent of switches happen within a week, with the new bank dealing with all the direct debit switches and offering attractive bonuses.
A spokeswoman for RBS says: “People believe it’s difficult to switch bank accounts and so are often reluctant to do so. However, we currently offer a £150 switcher offer, and using the Switcher Service it takes less than seven days for all direct debits, etc to be switched over to a new account.”
Yet there is still a surprising degree of inertia. But why is this? Parental influence is a big factor for those making their first banking decisions, with 59 per cent of 18-24-year-olds banking where their parents do – and often not leaving.
Jonny Williams, head of financial services at Womble Bond Dickinson, says: “People see their mums and dads using traditional banks and the first account they ever open is usually with the bank nearest to where they grew up and they are often still with that bank. It’s a comfort blanket.
“Practically, it’s beneficial if you are applying for mortgages and other financial products to have been with a bank for a decent amount of time, as that will be something the algorithm looks at.”
At the moment, many people in their 30s and 40s are taking an account with one of the challenger banks, but retaining their account with a traditional bank. Callum Murray, chief executive of Amiqus, has done just that; despite taking out a Monzo account, he still has the NatWest account he opened when he started university more than 15 years ago.
Caroline Stevenson, legal director of Womble Bond Dickinson, says: “Many of us are using banks like Monzo to track small purchases and for holidays because exchange rates are better but still doing our ‘big banking’ with a traditional provider.”