A greater focus on financial education will enable consumers to make better informed choices when it comes to choosing appropriate bank accounts.
Responding to a report released today by the Financial Conduct Authority (FCA), which reveals that consumers are unaware of, and lack confidence in the seven-day service for switching bank accounts, ifs University College says a lack of financial education could be behind the low uptake of the service.
The report found that in total only 1.64m accounts have been switched since September, which represents approximately 1 in every 50 (figures from BBA High Street Banking Statistics).
Research from ifs University College in its Young Persons’ Money Index found that those who have had regular, appropriate and dedicated financial education are more likely to switch bank accounts and choose more suitable financial products for their appropriate stage of life.
Commenting, Vice Principal Alison Pask said:
“Today’s findings are unfortunately not a surprise. Most consumers will choose – or more likely have their account chosen for them – at a young age and will stay with that account for life, unaware of more suitable offers available.
“Constructive efforts, such as seven-day account switching, which are designed to improve outcomes for consumers will be meaningless if consumers are not given the skills and knowledge to understand what they mean.
“Those with financial education are more likely to understand, research and seek out financial products which are most suitable for their situation.”