Consumers and businesses see overdrafts as a barrier when switching

The Current Account Switch Service was launched in 2013, supporting over eight million people to switch their accounts simply and easily. There are many reasons why people change their accounts, with cash incentives, customer service, bank reputation and personal recommendations all driving switching decisions.

While people can switch their bank account if they use an overdraft, some people and businesses see it as a barrier to switching. Our strategic focus makes it imperative that we understand changing end-user needs and that we enhance access to our services to power payments, champion innovation and give the UK choice in how it pays. Therefore, we commissioned research from IFF to explore the barriers consumers and small and medium enterprises (SMEs) who used an overdraft, both perceived and experienced, when switching current account.

Below are a number of key findings from the research or for a full exploration of the research – we will soon provide an on-demand recording so you can catch up on our webinar we held to launch the report.

Infographic The impact of overdraft on switching current accounts

The number of people and businesses using overdrafts regularly will likely increase in the future, as they are more likely to look for an overdraft over other forms of credit to address short-term cash flow issues – particularly as current macroeconomic conditions may make them more reliant on financial support. The onus is on the Current Account Switch Service, consumer and business information sources, banks, and regulators to ensure overdraft use is not a barrier to switching, and to consider what solutions might make switching with overdrafts easier.

We hope you find this research insightful, and we invite dialogue with all interested parties to consider what could be done to ensure consumers can find and switch to a current account that is right for them. You can contact us at

Pay.UK commissioned research agency IFF Research to undertake this research to understand the changing needs of end users, particularly as consumers and businesses look to overdrafts as a form of financial support. The Current Account Switch Service and the payments ecosystem have a clear role in addressing barriers to switching and ensuring access to services.

To read more about the impact of overdrafts in relation to switching current accounts, please download our report here.