Vulnerable people ‘may be missing out on better current account deals’

Financially vulnerable people could be missing out on getting a better current account deal due to fears around switching, research suggests.

People who are financially vulnerable are more likely to fear that they could be rejected by a bank and to worry about getting the same overdraft facility than other customers, a survey for the Current Account Switch Service (Cass) found.

Those deemed by researchers as financially vulnerable may have taken out high interest loans before, are struggling with debt, have little to no savings, have no regular income, or sometimes struggle with bills.

Regular overdraft users were also found to be more worried than the general population about being rejected or getting the same level of overdraft, the survey of 1,000 people across the UK found.

The research also found three-quarters (76%) of customers generally would be driven to switch for a reward, and 70% would be motivated by a cashback offer.

Just over two-thirds (68%) would move for better interest rates and 57% would make the jump for better products.

The ease of switching and the prospect of better customer service were also important considerations for 57% of consumers.

Cass is designed to take the hassle out of moving banks, with payments automatically moved over to the new account.

Since it launched in 2013, over 6.7 million accounts have been switched and more than 100 million payments have been successfully redirected by the service.

Maha El Dimachki, chief payments officer of Pay.UK, owner and operator of Cass said: “The long-term impact of the Covid-19 pandemic could potentially lead to sustained higher levels of financial vulnerability for some time.

“It is vital those who could benefit from switching have access to information that allows them to fully understand the process. That is why we are committed to continue to raise awareness among this group.”