Switching banks the right way

The UK Current Account Switch Service (CASS) is one of the few genuinely good things in retail finance. Within seven working days your direct debits, standing orders and incoming payments move automatically — and any payments sent to the old account get redirected forever, not just for three months. There is no reason to fear a switch, and no reason to leave money on the table by not using one.

The trick is to pick the right account for the next two years, not the next two weeks. A £175 bonus is great in February; it does not help in October when an in-credit interest account has paid you £70 already plus another £40 a month for the rest of the year. Run our 12-month value column before you switch and the right answer usually pops out.

If you have an active overdraft, switch when the balance is at zero. Overdrafts do not transfer automatically and most UK banks now charge an Equivalent Annual Rate close to 39.9% — same range as a credit card — so paying that down before you switch usually saves more than any bonus pays.

Frequently asked questions

How long does a UK current account switch take?
Seven working days from start to finish under the Current Account Switch Service. Your new bank does all the work — direct debits, standing orders and salary payments are moved automatically, and any payments to your old account are redirected indefinitely.
Will switching damage my credit score?
Opening a new account is a hard search but a single hard search has minimal effect — usually a 5-point drop that recovers in two to three months. Closing the old account does not in itself harm your score, but losing the credit history attached to a long-held account can. If your file is thin, keep the old account open with a £1 standing order.
What happens to my direct debits during the switch?
Every direct debit, standing order and incoming payment is transferred automatically to the new account on the agreed switch date. Any payment sent to the old account afterwards is redirected to the new one — for as long as the old account exists. You don't need to tell utility companies, your employer or HMRC.
Are switching bonuses taxed?
No — HMRC treats cash incentives from a current account switch as a discount on services, not income. They are tax-free regardless of whether you pay basic or higher-rate tax. In-credit interest, by contrast, counts against your Personal Savings Allowance.
How often can I switch UK bank accounts?
There is no formal limit, but each switch involves a hard credit search and most banks block bonus eligibility if you have switched into them — or out of them — in the previous 12 to 36 months. Switching every 12-18 months for bonuses is sustainable; switching every three months is not.