Why switching to save money is easier than you might think

An important development from the financial markets: Why switching to save money is easier than you might thinkByKevin Peachey Cost of living correspondentPublished18 minutes agoSeeking out a better deal from your broadband, pay TV and energy suppliers? While you know it could save hundreds of pounds, you might be wondering if it's worth the hassle. But often it only needs one call or a couple of clicks - and banks even pay an incentive to people who switch their main current accounts.

Regulators have made the switching process easier in recent years, encouraging people to shop around when cost of living pressures have intensified. Which deals are the best for you still depends on your circumstances, but here are some of the ways that switching works. 'One touch' broadband switchVirgin Media has just been fined £28m by regulator Ofcom for repeatedly preventing customers from cancelling contracts.

Economic Details

The communications regulator said it uncovered tactics including agents deliberately hanging up calls, and customers being put on hold "for no reason". Millions of calls from customers were likely to have been mishandled over a three-year period which prevented or delayed them from switching to a better broadband, landline or pay-TV deal. Anyone switching now shouldn't face the same hassle.

Ofcom's One Touch Switch service, launched in 2024, means you only have to contact your new provider, not negotiate with the old one. Ofcom says you should check whether you are in or out of contract, external, as you could face exit fees. Some people are motivated to switch because they are fed up with the service from their old supplier.

Many do so in order to save money. So, customers may still decide to call their current provider in order to negotiate a better deal, or ask them to match the offer they could get by switching. Paid to change bankIn years gone by, most people would get a bank account early in their adult life and stick with it for decades.

Analyst Views

Competition now sees banks try to win over new customers by offering cash to switch - but only if you use their current account as your main account. Many people have been put off that idea owing to the perceived complication of wages being paid into that account, and direct debits and the like needing to be moved. The Current Account Switch Service, external now does most of the hard work.

You provide the account and debit card numbers for the account you are leaving to your new bank and choose a date for the move (although it can take seven days). Behind the scenes, the service will then automatically transfer direct debits and standing orders, move the balance, redirect incoming payments, such as benefits or salaries, and close your old account. If anything goes wrong, you'll be refunded any interest and charges on your old and new accounts.

If you have an overdraft, you'll have to check the new bank offers to cover this, and the amount owed will then be switched automatically. If not, you'll have to pay it off.

Economists are analysing what the news means for the markets.