Is current account switching boom driven by cash carrots on offer from banks - or something else?
en
January 31, 2025
TLDR: Close to a million people switched current accounts last year with Lee Boyce and Georgie Frost examining data about the trend. The discussion also covers HSBC exclusivity in banking, government stance on cashless transactions, criticism over HMRC customer service record, and potential changes in car insurance rates.

In this episode of the This Is Money podcast, hosts Lee Boyce and Georgie Frost explore the recent surge in current account switching, with more than a million people changing their bank accounts last year. But what’s driving this trend? Could it be merely the attractive cash incentives offered by banks, or is there something deeper at play?
Understanding the Current Account Switching Boom
While switching bank accounts might have once been a cumbersome process, the current account switching service has revolutionized personal finance by making it easier for customers to change banks. Key findings from the discussion include:
- Surge in Switching Activity: Over a million individuals switched their bank accounts last year for the second consecutive year, indicating a strong consumer willingness to seek better financial deals.
- Top Winners in Switching: Nationwide led the way with the highest net switching gains, followed by Barclays, TSB, and Lloyds. Interestingly, app-only banks like Starling and Monzo don't offer switching bonuses yet still managed to attract customers through excellent service and innovation.
- Attractive Cash Incentives: Banks like Nationwide and NatWest offer switching bonuses ranging from £175 to £200, appealing to those wanting a quick financial gain. This winning strategy suggests many people are indeed chasing these monetary incentives, rather than being solely dissatisfied with their previous banks.
The Importance of Customer Service and Accessibility
The podcast also touches upon the importance of customer service in retaining customers. Banks that may not offer switching incentives, like Starling, are attracting users through good customer experiences. Key points include:
- Impact of Service Quality: Customer service is becoming increasingly important as consumers seek organizations that prioritize their needs. Poor service often leads to customers leaving their banks, despite any financial incentives.
- Technological Adoption: The realization that banking can be efficient and user-friendly has cemented the current account switching service as one of personal finance's success stories.
HSBC's Exclusive Account Requirements
Interestingly, the episode discusses how HSBC has raised the entry criteria for its exclusive premier account, which now requires a higher income and larger investments:
- Selective Banking: With a minimum income requirement of £100,000 and significant savings, HSBC appears to be narrowing its focus to wealthier clients. This move could be prompting potential customers to reconsider their banking choices.
Government's Stance on Cash Acceptance
The government recently ruled out proposals to force businesses to accept cash, a decision that raised questions about accessibility for vulnerable groups. Host opinions suggest:
- Consumer Choice is Key: While some argue for universal acceptance of cash, others feel businesses should have the autonomy to choose their payment methods, emphasizing a balance between consumer rights and business decisions.
HMRC's Customer Service Woes
The podcast addresses HMRC’s ongoing struggles with customer service, particularly during peak tax return times, revealing critical insights:
- Poor Call Handling: HMRC's performance has dipped, with only 66% of calls being answered. Concerns about their ability to manage taxpayer queries are rising, especially as more individuals find themselves in the self-assessment system.
- Importance of Transparency: Transparency and efficient communication from HMRC are crucial for taxpayers who require guidance, especially when navigating the complexities of tax submissions.
Positive News: Decrease in Car Insurance Rates
In a twist of good news, Lee shares his experience of receiving a significant decrease in his car insurance renewal:**
- Cost-effective Auto-Renewal: Lee reported a 23.1% decrease in his auto-renewal quote this year, indicating a shift in insurance trends. This highlights that while costs have risen substantially in previous years, competitive forces may finally be turning the tide.
Conclusion
The current account switching boom suggests that consumers are increasingly motivated by financial incentives, but quality customer service remains a pivotal element in their decision-making process. HSBC’s shift towards serving wealthier clients raises interesting questions about banking accessibility, while concerns over HMRC's handling of taxpayer inquiries illustrate the need for systemic improvements. However, amidst these discussions, the welcome news about declining car insurance rates offers a glimmer of hope for consumer finances moving forward.
By unpacking these intricate themes, this podcast sheds light on the motivations behind the current trends in banking, taxation, and insurance, providing listeners with relatable and actionable insights.
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Welcome to This Is Money podcast sponsored by Charles Stanley Direct. I'm Georgie Frost and joining me today is Lee Boyce. And coming up, over a million of us switched our bank accounts last year. But where did we all go? Not HSBC. The bank, meanwhile, has announced that you now need to be even richer to qualify for its exclusive current account. No riff-raff here, please. Also today, the government rules out forcing businesses to accept cash, need help with your tax return.
HMRC stops picking up the phone, its calls answered full by a half. But Lee has some good news about car insurance. Don't forget to stay with all the latest breaking money news. Just go to thisismoney.co.uk or download the app. Take control of your finances with Charles Stanley Direct. Invest, save, coach or plan.
Using technology where it's helpful and people where it matters. Our website and app make trading cost effective and flexible. But we're more than just an online investment service. We're here for you regardless of your financial needs or if your life takes an unexpected term. Your finances your way. Take control today with Charles Stanley Direct. Sign up now. Investment involves risk.
The first, for the second year in a row, over a million of us switched our bank accounts last year. But where did we go? Well, Nationwide had the highest net switching gains, followed by Barclays, TSB and Lloyd. So, have we fallen out with the app-only based banks? Or did we just follow the money? With the top four offering between £175 and £200 in switching bonuses. Lee, as I said that, you nodded your head.
So I think I can guess what you think is behind these figures. What do you make of them? Tell us more about the winners and the losers as well. Hey George, I think a lot of people are chasing the money. I think that's exactly what's going on in a lot of these banks. When they're not offering switching deals, they're not gaining current accounts, which is as simple as that, really. And the money that's on offer is pretty good. It's usually quite easy to get. It's not like billions of huge to jump. There are some hoops to jump.
but it's only played by the rules. The money gets paid in faster than ever before. I mean, some banks offer it within three working days. I mean, that is fast to be getting a nice chunk of cash. And if you're a smart person, you might have a secondary bank account. I'm a big fan of a secondary bank account. I've always had a secondary bank account because I like doing a bit of spending out of it. I like doing a bit of saving in it.
and I think it's handy thing to have. And it's a good way to switch without having to do your main account. Now, you all need to have a couple of direct debits and things like that set up, but it's not complicated. It's not difficult to do. I think the current account switching service has been one of the big success stories actually in personal finance in the last decade or so. It's driven, I would say, a lot of competition. People who, you know, fed up with their bank for numerous reasons,
can easily with a few clicks of a button switch and all direct debits are guaranteed and they do like the donkey work for you. It's a low-brainer if you're fed up with your bank. And drilling into the stats, we've got a kind of bigger look here. So before I go into that bigger look, there was a couple of strange things in the most recent data.
One of them being Barclays actually had a rare green figure in one of the quarters, which is very rare for Barclays because they tell me because you've got on your on your page, which is really interesting, is the fully year stats actually Barclays is well down the bottom of that one.
It's well down the bottom, yeah, because it very rarely has switching incentives, but it just shows you what the power of these these switching incentives have. So this five year one you're looking at, it's actually four year because of the way the data works. So it goes from the start of 2020 to sort of third quarter of 2024. Nationwide is top.
with 361,800 switches. So this is just pure current account switches. These are people using the service. I should point this out. This isn't just someone walking into a high street bank if you can still find one opening a current account or just doing it online. This is actually using the switching service.
And second year in a row, more than a million people, which I think is an incredible thing. That's a huge amount of people and it's driving innovation, I think, and making the banks have to be better and also offering money, which is great. It's a nationwide top of the charts from the start of 2020.
three hundred sixty one thousand eight hundred. Part of the reason for that big big big part of the reason is the money that they offer and people chasing the money following the money as you say. But the other thing is I have the impression that people don't want to miss out on the potential for a fair share payment this year.
So we've had fair share payments in the last two years. Nationwide has been doing very well. It shares its profits. It's a building society. It's a mutual. It's meant to be for the holders. I mean, it's snowballed into something far bigger than any other building society. I mean, it's absolutely massive. But people, I think, are very acutely aware that there could be another share.
payment this year from nationwide and they don't want to miss out on it. And if you've switched for 175 quid and you also managed to get the fair share payment by following the rules and it's pretty simple, lovely stuff. I mean that is a great sum of money to get. So I think that's why the top. Second place is Nat West, 219,847. Again, just people following the money. But the other thing you should actually point out of this is that
I still think people want somewhere with good customer service and a good app and those kind of things. And clearly, Nationwide and that West are doing something right to be pulling in those kind of numbers over the last four years. Third in the list is Starling.
Now, you alluded to it earlier. They don't offer switching incentives. Starling and Monzo don't offer switching incentives. The way they are attracting customers is by customer service and by being quite innovative and nimble. They've not always been part of the current account switching service data either. I should also point out, but 142,127 switches to Starling.
56,372 for Monzo. It's pretty good going. The only other two banks that are in positive numbers, HSBC and Lloyds, both around 65,000, then you go into the losses. Some of them are seismic, bark, blues, as we mentioned, 218,000 net losses, Halifax, 204,000 and Santander.
Santa has been in the news quite a bit, hasn't it, in the last couple of weeks? They were talking about exiting the UK market. Whether that's true or not, 143,000 customers have switched away. That's a net figure. I think a big reason for that is the 1.2.3 account was obviously very popular. It's been rebranded as the edge account. I'm not sure it's had the same pull. You think about that 1.2.3 account, George, how massive it was. The sports stars they had plugging it.
But the generous rates, it was offering the cash back. It was a current account that just flew. Really, really did. And then TSP of the other
banking here that are in six-figure minus, I think it's 111,858. Actually interestingly, Chase is in here, 22,434 net losses. Chase had that very good cashback deal when it's coming out and it appears people abused it and left. And that's what's happening now.
It was always the thing that if you had your current account, you probably opened it when you work at school or go to university. Remember all those teasy university things we've talked about this before. And people to stay put because they had a local branch, probably close to where their childhood home was. And they just there was no reason really to switch around. You might have had some lousy customer service or whatever. But you know, there's plenty of choice. I think we've always had a lot of banking choice. I think these
the current account switching services, been very good for competition and getting people moving about and getting out of that habit of just staying with the same bank for decades for no reason whatsoever. Yeah, I mean, I always used to joke that my longest relationship still was with HSBC, my former bank, 18 years, 18 years, and then I moved across.
How did you feel, Georgie? Was it like a heart-wrenching moment? Or was it like, you know, this is actually all right? It was okay. I mean, there were a few little annoying things. Like, you assume everything's going to move over, but of course, there are some things that you pay with through your card. And also, if your cards, which is actually not a bad thing, but if your cards remembered on something like a shopping site, then of course, you have to re-enter the card details, which I always say is not a bad thing anyway. You shouldn't have...
You should have a shopping site, remember your car, it just makes it too easy. That sounds like a bonus to you. Yeah, exactly. You're moving over and actually you question whether you really do need that thing that you're trying to buy. No, I totally get that. I wonder if people just thought, though, Lee, because I mean, I'll be honest, I left, I think, because of the bad press. You know, it was slightly existential. Like, it wasn't anything that affected me, but it was, you know, it was just general bad press about this bank, and then I decided to move and not for switching money.
But I'm wondering if people want to think that, you know, banks are kind of much of a muchness. And that's why the switching bonus differentiates and is the reason to move. But I'm curious as to how many of those 1.2 million that switched last year moved the year before. I'm wondering if these are repeat switches. You are either the sort of person who's like, look, I'm just going to stick with my bank, you know, much of a muchness.
Or I'm going to be someone who's constantly chasing the money and moving. And so, you know, is that such a great thing for banks to have the sort of fly by night kind of people just coming for the money? I suppose it's a magical merry-go-round. You kind of want them, the merry-go-round to stop when they're looking for a mortgage or something where they're going to stick with them. Do you know what I mean? Like... Well, that's true. I mean, to be fair, I mean, that's what banks really ideally want. You know, they want to cross out your other products. You know, that's... Exactly.
that's how they make money and you're totally right you know the constant merry-go-round probably isn't great for a lot of banks but it's still a small number when you think about how many people are in this country doing this and I think that a big chunk of those people you're right probably are repeat people and I also think that they
sort of played a game and had the secondary accounts rather than it being like a main account and they're just jumping around. I reckon quite a few of our listeners might be in that boat, you know, I think we have a savvy listener base. So do let us know if you are someone on that merry-go-round of switching bank. But listen, I'm all four things that kind of shake up, you know, the status quo. And I think the current account switching services certainly done that in the last decade.
All I will say Lee, as a final point, was not really a final point, we're going to obey HSBC in a sec, but what I would say about this, and this isn't related to current accounts because I've had no problem with my moving current accounts, but when you go and chase the money or chase the better deal by switching and moving, really consider
the quality of what you're going to move to. Are you really unhappy with where you are at the moment? And is the saving you're going to make going to be worth it? Or is that bonus? Because I've gone through this plava with changing my mobile phone deal. Oh, my Lee, honestly, I have.
on my lead. I've moved from EE to three and now I've ended up back on EE sort of antennae with a brand called Spusu I've never heard of where I can't get Wi-Fi calling on my phone and you know God forbid we're in a country where you can't get any internet reception so there's times I can't get anything on mobile reception at all and I feel like I'm just gonna go crawling back to EE you know tell between my legs and apologize and say take me back but that would be my third move in the
You've got a call-in-off period, no, because you would be Georgie, so. No, no, no, the spousses only a month one. I used my calling-off period with three, absolute disastrous one, that was as well, because, oh, they kept trying to say, oh, yeah, you owe us this money, and I was like, well, I don't owe you that money, because I'm on a calling-off period, and they're, oh, yeah, just ignore it then.
Oh, great. So I'm just going to stress out about owing you hundreds of pounds where, oh, just ignore it. Yeah, thanks. Don't send me the text. Anyway, I'll go down that. Put my point of this in summary. You've got to, you've got to do your homework and make sure you have good customer service and you're not going to end up. What about the money, Lee? It's not always about money. I use the current account switching service. I reckon probably about 10 years ago now.
I ditched my bank that I opened before I started university because I was fed up with it and moved over to first direct for the bribe at the time. I think actually it was probably 100 quid and it shows you how much it's been ramped up over the years to track people in. It has to be high enough amount. But I found it seamless. I thought it was a really simple thing to do. Where are offering switching deals at the moment? Where can you get switching deals?
The first direct's got 175 quid nationwide, 175 quid. If you go to Flex Direct, Santander, 150 quid for edge, and TSP's got 100 quid of its spin. They've account. They all come with various levels of kind of, you've got to pay an X amount of money, you've got to have direct debit, you've got to log into the app, all those kinds of things. So before you do jump ship and get tempted, make sure you have digested those teas and seeds. That's to make it quite clear, and it's usually quite clear before you leap.
Let's look at HSBC's offering here, talking about teas and seas and how much you have to pay in. Well, they're talking about how much you have to earn because their wealthiest customers who go for their premier account will now have to be even richer or have even bigger amounts of savings before they can qualify for this account. Lee.
You'll need one million dollars. Actually, no, it's one billion dollars now. Yes, it's got a premier account. And actually, if you are someone that earns a sizable income. What's a premier account, Lee? Just because it's not... It's an account that HSBC offers exclusively to its wealthier... Well, they're not the only bank to offer this sort of account, are they? No, exactly. And that's what I'm saying. If you're someone that earns a kind of free chunky income, it's worth checking out what banks have got an offer.
Because sometimes there are exclusive things. Sometimes they're paid for accounts. Sometimes they're not. And in this instance, this HSBC account isn't a paid for account. It is an entirely free account. But it comes with some pretty big requirements to get it.
So it's to do your salary and or savings in investment, right? So it offers perks, got family travel insurance and a few other things that it offers. Family travel insurance actually is not a bad product to have, you know, can be quite a big saving on your travel insurance if you have someone that travels around quite a lot.
before you have to have an income of £50k. That has now been jacked up till you've got to be earning £100,000 a year.
and having a hundred thousand pounds of savings and investments. So the change has already been made for new customers since September so if you were someone that was looking to open this since then you would have seen these eligibility requirements but it's actually written to customers that have got premier accounts and it will be rolled out to everyone from April so if you are someone that's not quite rich enough
for HSBC and its primary account expect to be downgraded sometime soon. Banks always changing gold posts and looking at how things change. £75,000 a year is a very, very good salary. £100,000 a year. Just sounds
You know just it's got that kind of like Lux field doesn't it in terms of like if you're only a hundred pounds a year You're probably gonna be looking at somewhere to be maximizing what you're getting from your current account So yeah, and if you if you are someone that's going to lose this Have a look around see what else is out there because big banks are
We were talking about this minute going across selling. That's why they want you to have big pots of savings and investments and stuff. One thing I would say about that as well, the £100,000 in savings and investments, of course, £100,000 in savings with HSBC would take you over the financial services compensation scheme limit of £85,000.
So I don't know how wise it is to be holding £100,000 in one bank. If I'm being quite frank with you, we always say to people who should spread your money around FSES, you're going to be ticking over that.
Yeah, not great. It's also got, it comes with a £500 interest free overdraft as well, which has been quite a lot of noise lately about overdrafts becoming pricier. Some of the banks have been hitting APR up, whacking it up. But presumably, if you're someone earning that kind of money, you're probably not going to be dipping in and out of your overdraft. And if you've been in and out of your overdraft,
you're probably going to be wanting to listen to a podcast like this to figure out how on earth you're finding yourself in that position. So anyway, perhaps the perks compared to other accounts out there, Lee? Well, it's pretty good. As I say, the family insurance can be worth quite a lot. Barclays has one that comes with Avios cashback rewards and exclusive mortgage options. But if you're not someone that's got mortgage, Barclays, does that really matter?
And actually, I should point out here that it's very similar. You've got to have saving investments, £100,000. And that West has got premium accounts, £100,000 income or 120 grand joint income. Again, you're going to need £100,000 savings investments and a big mortgage of that West, actually £500,000 minimum.
So all these things you need to sort of digest and have a look around that. But if you're earning good money you should be with an account that's going to be working hard for you and or tying it out with something like Avios and doing a lot of your spending on reward credit cards as long as you play by the rules aka pay off the full balance every single month.
which most people who are earning sums of cash like that will be wise and know how to do all that. You know, for example, I have an American Express card. I've got the app on my phone. I've got it set up to pay off monthly. Very easy to use. And look at Avios. Now, that's a whole different hell of fish. The Avios are trying to get your head around that and get the calculator out and try and spend those. But that's a debate for another day.
The government has been making lots of announcements about money. But forcing businesses to accept cash has not, nor will it be, one of them.
The economic secretary to the Treasury, Emma Reynolds, told the Treasury Committee there were no plans to do this despite concerns over access to cash for the most vulnerable in our society. Last year, the Committee launched an inquiry into whether rules were needed. Lee, we have been talking about this. A fair amount on the pod. What's the latest? What do you make of the decision?
Well, yeah, we do talk about this quite a lot because as you know, I'm a big advocate for being able to spend cash and using cash and not to turn into a cashless society, whether you agree with me or not, that's your property, but that's my viewpoint. But in the same breath I should add here, I'm never too keen on government meddling and meddling for meddling sake.
I personally, you might be surprised to hear this, actually think you shouldn't force anywhere to take anything. If a business doesn't want to accept cash, that is their prerogative because you go somewhere else.
If it's a service or something else, I think that the option should be there. I think it's like supermarkets. I think it's slightly different. But I agree with you in principle on everything else. But I do think something where you kind of have to go and get some food, right? Well, it's actually not. And again, we've had this conversation, but it's just like going to big supermarket recently stripped out.
pretty much all of the man-tills and they want you to scan all your shopping and all that. I can't bear it. It's just not for me, you know, and then they're card only and you just, it drives me nuts. You know, it's kind of like they're forcing you to do your shopping online.
So what happened basically Emma Reynolds, who's the economic secretary to the treasury, has just turned around after an inquiry that was launched last year and said they're not going to make it compulsory for businesses to accept cash. Cash is a matter of ecosystem if you think about
all the bank branches are closing down. You think about the security files, that's the ferry, all this money around and the holding places where physical money goes. It could be quite costly. But as a consumer, you should have the choice to spend how you want to spend your money, your own money. And for a lot of people, especially people that are struggling, they find it easier to budget with physical cash. I still like to budget with physical cash. Again, said this many times in the podcast,
I get paid, paid a straight down for 300 quid out of the cash machine. It would last me easier month of my kind of like floating around money, the haircuts, the couple of pints, you know, magazines, things like that. Just a little discretionary spending where I can keep on top of it more than just tapping the card. So she said, I don't think we're anywhere near having a cashless society.
and there's no plan for it and she said I certainly in my everyday go to many businesses where they accept cash we're not making plans for a cashless society and she pointed to some evidence that was provided to the committee from the Association of Convenience Stores which said 99% of its members still accepted cash and had no plans to stop.
But there was a survey that we had on our site a little while back by Link, who brought a lot of the ATMs around the country. And half of Britain said they had trouble pained in cash last year. Car parks topped the list. 21% pointed them out. Don't get me started about all of the different apps for all of the car parks and having to go through the rigmarole. Then you were talking about your mobile signal early and not having the right signal. Then you finally get through it. You've had to set up an account. You've done this, that and the other.
and I'm paying £1.80 and then my bank asked me for a one-time passcode. And you just think, God, if I just had £2, I'd rather just leave the £20 and just put it in a machine and get on with my day. You know, and they're not all built up equally. So there's a, out of fairness, there's a car park that I use quite regularly in my high street. It's got the choice of card cash.
and app, and I do a mix of all three, depending on what I'm doing. And the one benefit of the app is if I need a little bit extra time, you could just go and press it rather than having to go back to the car bar. You know, there's little things that actually, they can be quite convenient, but they can also be quite frustrating, depending on
your time and what you're doing. Cafes and restaurants, 20% of those are trouble payment cash, the cafes and restaurants and public transport and pubs, 10%. Again, if you're a cafe and restaurant and you're not accepting cash, you are not being forced to go and eat there and die and they've made the decision. That's their decision.
Yeah. And if that annoys you, in my mind, just don't go and use your cart there. If you are doing well enough as a business to turn away a legitimate form of payment for stuff, well done. Exactly. And that's, again, my viewpoint and, you know, I'm not saying it's the correct viewpoint because, you know, everyone's, you know, we're in an age now where most under
sort of thought he's probably paid contactless more often than not for a lot of things and it includes myself you know i'm not going to i'm not sitting there saying i use cash every single day and that's all i do i spend i like the choice i like to decide how i spend my money most of the time the most convenient way to do that is contactless but there are times when
You find yourself with some money, you know, physical cash, and you want to spend it. And it is annoying when you can't. And I think that's what gets people's backs up. Horrible being told, no, with something that's been around for thousands of years, can't be used to be exchanged for goods or services. I get it. I understand why people get quite happy about it. That's it for part one.
I'm joined now by Rob Morgan from Charles Stanley for our weekly investing explain feature. A timely question for you Rob, after the deep-seek market madness we saw on Monday, how can I invest in a global fund that have less exposure to the Magnificent Seven and Big US Tech?
Yes, increasingly investors have become more concerned about how concentrated the US market and therefore the global stock market has become with those magnificent seven tech stocks now accounting for almost a quarter of the global index and amazingly these seven stocks are valued at more than the seven stock markets outside the US combined the next seven biggest that's Japan the UK, Canada,
China, Switzerland, France and India. So they are huge. Meanwhile, they're going to represent a third of the US stock market. So a huge proportion. And it means investors, especially those taking a passive approach of buying the market have become increasingly reliant on them. Some would say too reliant. A wobble among them is therefore hugely impactful. And we have seen
this recently with the news about China's competitor artificial intelligence deep-sea creating the volatility we saw earlier this week. Now there's a few ways to dial back this concentration risk in markets. One is through an equally weighted fund or ETF rather than the traditional market cap weighted approach and the other is by simply choosing funds with less emphasis on the US and the tech sector.
So equally weighted ETFs firstly, there's a few of these available through investment platforms like Charles Downey Direct, and commonly they're based around the US S&P 500, but they've started to appear now for the global index to the MSCI world being the base index used. And the principle with these is that instead of weighting each company in the index according to its size, which is the traditional way of doing things, each constituent is given the same way. So using the S&P 500 as an example,
each company is given a weight of 0.2%. And instead of Microsoft or Nvidia being 6% of the funds say those stocks are only 0.2% of the fund, just like all the other companies in the index, meaning that if there's a broader set of winners going forward,
then that approach stands to capitalize and it does also prevent overexposure to the tech heavyweights, which may or may not do well from this point. Another approach is to choose an active phone manager that is underweight, the Magnificent Seven, and quite often active managers will be
underweight because they view having any stock in a very large quantity a significant risk. In particular consider funds that prioritize less expensive shares a so-called value approach or having an income bias prioritizing companies with hefty dividends and these sorts of funds will typically be far less weighted to US tech stocks as they'll generally be excluded by the manager on the basis they're considered quite expensive or they don't produce decent enough dividends. So these funds
stand to offer something different in a portfolio for investors, and they will potentially serve to protect a lot more should those big tech stocks stumble. Brilliant. That was Rob Morgan from Charles Stanley. Welcome back. Just hours before the midnight deadline, millions of people had yet to file their online self-assessment tax returns, meaning they face a fine of £100. HMRC has been warning us to get on with it or pay up.
They've also been promising all sorts of crackdowns this year to make sure that we pay our taxes. One promise though that I'm not hearing too loudly Lee is to answer their phones. Queries are not being dealt with promptly. Mistakes take an age to be corrected and delay sometimes as a result in taxpayers filing their return late. According to a Freedom of Information request, around 44% of calls were answered in the tax year ending April the 5th, 2024.
compared to 60% in 2021-22. Lee, shocking. That's a slipping standard combined with more people being dragged into having to do self-assessment. It is a sorry state of affairs, the call center at HMRC. And the thing is, you do not really want to have to phone HMRC. It is the kind of probably the last thing you wanna do
And the reason why I say that is because you would go and find the answer somewhere else if it was easy, probably. And they were trying to make everyone go into the chat box. We did a kind of big investigation into it the start of last year.
about how they basically so many calls were dropping out and so many calls were going unanswered and basically chatbots just not giving the answers to questions that can be quite complex. You know that's probably why you're getting in touch with H&MOSSE as I say you don't really want to do it. So there was a report by the Public Accounts Committee
And it was quite damning, actually, Georgie, said HMRC is deliberately offering taxpayers poor customer service. That is strong words. To get them online, is that what they reckon is going on? Essentially, that's where it's all kind of going, isn't it? That's what they're trying to do. They shut the self-assessment helpline for a fair few months in the summer.
average call waiting times at record highs 23 minutes in 23 24 tax year up from 16 minutes 24 seconds in 22 23 I mean 16 minutes is long enough 23 that's a big jump HMRC answer just 66.3% of customers attempts to speak to an advisor well short of its 85% target
last time it met that target was in 2017-18 and you know if more of us are going to be dragged into paying tax because of fiscal drag and you know having to pay tax on our savings interest or you know all sorts of ways that people are getting kind of
caught into the self-assessment net, you gotta make it easier for people to, you know, have queries. Now listen, I understand that there's probably a fair few people that do call that I'm not gonna call them time-wasters, but I'm gonna say probably could have got the answer somewhere else, like quite possibly would have got the answer somewhere else. But on the whole, you would expect a tax office
to be absolutely your call. I wouldn't say promptly but within a kind of reasonable time and answer or help answer
your queries, and it's falling well short of standards, and it's not good. I don't know how they fix it. It's only going to get worse. It worries me, though, because like I said, I'm someone that has to do this every year, a final self-assessment tax term, because I'm obviously a freelancer.
And it worries me that you hear lots of noises from HMRC saying we're going to crack down a lot harder on small businesses and all that sort of thing, basically people like me. We're just fine because I do everything above boardly, don't worry.
Of course I do, Lake. You've got your secondary accounts, you've got your cash coming out of the... There's nothing wrong with putting dog food on expenses, is there? No. Of course I don't do that. But it is worrying, because actually I've... In a year that I didn't have to do a self-sufficient tax return, they thought I did, even though I'd told them that I didn't, and so they immediately tried to be because I was late, apparently, even though I didn't need to do one. And thus, since you had hours and hours and hours trying to get through to them, I just think there are going to be more mistakes being made. People are going to question things more if they're going to start cracking down.
speculate to accumulate you know really put some resources into HMRC if you really want them to do a good job because i'm concerned that on the resources they have at the moment and everything going online and they're trying to crack down and trying to get people to pay more tax etc there's going to be more mistakes that can be made more people are going to be wanting to get in contact and they're going to be stuffed in the interest of a little bit of balance here you know it has it has
had 51 million pounds of additional funding last year to cover 1500 more staff but you know the argument is that enough or not and HMRC did come out kind of swinging a little bit and said you know we've been moving services online as part of making tax digital and 66 percent it claimed that 66 percent of the 37 million calls it received last year could have been done online. That is quite a big number and I think it's all about balance but it's about balance and
You know, raising awareness. Has anyone been on, have you been online to try and sort out tactics? It's not easy. And it's like, you have to do this code and you have to do this. And if they made it a nice, seamless service online, I'm pretty confident people would be going there too. So, you know, maybe it's just not resources into, you know, staffing. You also need to up the technology a bit. If that's where you want people to go.
Yeah, yeah, totally. And we actually, we know it's OK. It's fine. And I don't blame me. We actually had a story recently, which was one of our reporters was unsure whether or not they were meant to be filing a tax return because they've done one in the past had written a letter well ahead of time last summer, saying he's the reasons why I don't think that I need to file a tax return.
and tried calling and just tried to really figure out whether or not they're meant to be doing this. And they've heard absolutely nothing back. They can't figure it out. So what you meant to do in that scenario, you know, do you just keep on trying to call? And it said this and it said here, I filed a tax return in the past.
But I took HMRC's online survey, which said I didn't need to do one for last year. HMRC was putting out public announcements and saying, please don't phone us, just fill in an online form if you no longer need to do a tax return. Did that last summer. Got an automated response saying, if your request is successful, we will confirm in writing. If your request is not successful, we will write and explain the reason why or ask for further information. However, I've heard nothing more. Send a registered letter to HMRC at the end of the year.
Obviously, worried and sending in the evidence, trying to notify them and that they didn't plan to file a tax return unless they got back to our reporter ASAP. Still haven't been heard and think worried about being fined. You know, it's a sad state of affairs, that little story there. I'm sure the person that's involved in this is not alone in these kind of little niggly things.
that the person has done the right thing, they've gone and done their online survey, has requested, done the form, going to be written to either way, but hasn't been written to. So what do you do in that scenario? That replicated over lots of different stories and lots of links, you can see why. It's very complicated and it's very hard to probably balance out the seasonal requests that HMRC get as well. There's probably lulls and then there's probably times like today where there's a trillion people trying to phone
you know, the tax office at the very last moment. And some people would argue, look, you've had a year, almost a year to get your tax return in. So, you know, what are you playing the wrestling round out? Yes, yes, yes, exactly. You know, but it doesn't happen often that way. So, Lee, look, let's look at the figures next year. They've got all this extra funding. And actually, George, just quickly before we move on, I should probably give a little bit of HMRC response as well. Because obviously, it's very strong, this report that's been
created and shown just how poor the customer service has got. Jim Harrow, who's first permanent secretary and chief executive of HMRC said, the committee's claims about our customer service are completely baseless. I don't mean completely baseless. I mean, they view stats or I kind of find that a bit. In reality, we've made huge improvements to our service standards. We've called wait times down by 17 minutes since last April. So that sounds like
they're using stats that may be a little bit behind and these little changes. That's what I mean, the stats are from up to April last year. So look, we'll see what the stats are April this year. Exactly. And he went on to say, we will always be there to answer the phone for those who need extra help. At the same time, more than 80% of customers are satisfied with our digital services with more and more people using them to quickly and easily manage their tax affairs. So for interest of balance, that's what we said.
Well done, Lee. Thank you. But we do have some good news, and I want to focus on that. So this time, though, it's from a bit of an unlikely quarter. Car insurance, Lee. Tell me more. Give us some good news. Yeah. So I see our household as a bit of a bellwether. It's a bit of a barometer of where insurance costs are going. The reason for that is because our car insurance is up in the first week of January. So it started the year. And for the last couple of years, we have had some
absolutely astronomical auto renewal quotes come through including last year it was up 46.5% which is absolutely incredible with being with the same insurer for over a decade and absolutely nothing's changed except the car is a little bit older and it's done more miles and it would have depreciated in value somewhat so how on earth
was I being quoted to such a mad renewal. Now, that's nothing alien getting an auto renewal quote that's pricier than the last year's quote. And I'm quite up for the fight. I'm always up for the fight, Georgie, to bring bills down. So I'll never let it rest. You know, first port call, phony insurer, what's this all about? And then for the last couple of years, it's kept soaking up at higher repair costs.
Car thefts, you know, how true that is. I mean, we read about it obviously a lot in the press about cars being nicked, but there's cars being nicked and then there's kind of cars that probably ain't going to be nicked, if you know what I mean. And I think I like to think I'm in the latter category of that. So find them up. There was no wriggle room whatsoever last year when I've done this. So it ended up doing that the most painful of tasks.
comparison website filling in all the details tweaking the mileage a little bit to try and get the cost down a bit tweaking excesses sitting there thinking I'd rather be doing absolutely anything else on planet earth than doing this right now
Somehow it always falls on me to do this because I'm a finance journalist so that means naturally I have to go and do these things. I managed to get the cost down but it was still up way loads on 2023. Did a story about it. Did a story about it in 2023. All snowballed because people over the course of the years saw how much their car insurance was going up and just how crazy it was.
As the bellwether as the promise i come with good news my quote auto new quote 23.1% down it was down way i can believe it almost 100 quid off of the cost of cover making it the cheapest quote we've ever had.
for the car since you've had the car brand new six years ago. I read the letter, I smiled at the letter, I put the letter down and I felt a sense of time washing over me, whereas knowing that I wasn't going to have to phone the insurer, knowing that I wasn't going to have to go and crunch all the details through the comparison website. Could I have saved a little bit more money rather than just doing nothing quite possibly, but I don't think I would have been able to save much more than what was there.
And do you know what? I let it auto renew. I can't believe that. Let's just come out of my mouth. It was so beautiful doing nothing, George, moments where you kind of go, yeah, do you know what? Feels good doing nothing. Yeah, that's just, that's just auto renew it. That's fair. That's fine. You know, and you're kind of like, great. Now, I'm not saying absolutely everyone is going to end up with a lower auto renewal quote.
But I think it's just showing the direction of travel that hopefully we're over the car insurance hump. We had the energy price cap big spike and then it slowly come down, not as low as it was, but at least it's come down to a more manageable
amount. I kind of wondering if it might be the same for car insurance. And there's some stats back in the start saying that car insurance costs are coming down. But yeah, you're right. You should, whatever you do, you should shop around. For me, it was just about, I've kept track every year of how much the car insurance has cost. And I know that this is quite a lot lower than any other year that we've had it. And rightly so, you know, all the years and no claims, appreciating car, it should be that way. So that's kind of
Where it looks that but if you're getting an auto renewal that's higher or you're just looking for car insurance, you're shopping around, you know, comparison websites are necessary evil. You know, they're going to be the places where you're going to be able to drive down a cost.
We've got a bit of a guide here, actually, about other ways. You could consider a telematics black box policy. That's typically for younger drivers because the costs are getting on the road for under 21s when your first partial test is just astronomical. In fact, someone keeps on parking outside our house and it's got all of those stickers on the back saying, sorry, I'm driving slow, so slow. Dad's made me fit a black box or something like that. They are around.
You want to be careful of how many named drives you had, you know, don't just name everyone on your policy if it's needless. There's still this sneaky thing where paying annually is cheaper than paying monthly, considered basically about finance, so you end up getting whacked. Protect your known claims bonus, increase your access, you know, all very, very dull things that I haven't had to do this year. And make sure that your car is secure as it can be, you know, and that sounds
you know like sucking eggs but you know we do sometimes let our guard down and make mistakes but most modern cars now have immobilizers and tracking devices and things like that and make sure that you put all of the correct things that you've got and make sure that you are telling a comparison site how secure and safe.
your car is. It's also worth making sure you're getting your mileage as nailed on as possible. I think this is this temptation sometimes where you're doing these comparison quotes and you just want to get it over and done with as soon as possible because it's just so dull. And I think naturally people's going, yeah, probably do about 10,000 miles. Actually,
The reality is that you quite possibly are doing fewer miles than that, depending on your lifestyle, depending on obviously whether you're driving and commuting to work and school and all that kind of thing, but getting accurate mileage in is really important. The easiest way to do that is to see what the mileage is at. So yeah, shop around, but hopefully good news.
Good. Good news and good tips, Lee. Right. It is podcast reader comment time. No question. Comments. Because, you know, we are modern. It's not all Carrie Pigeon over at This Is Money HQ. This is X.
Saying that, though, I'm not actually on X. So Lee, I've absolutely no idea. I can read the comment, but I don't want the comments in reply to you. I do sort of sense, though, Lee, that last time you were on with me, you got so fed up with the length of the question that I was reading. That's what's turned you off and you've gone to X. Yeah, for the brevity.
But in interest of conciseless, I've decided that the market was weak. The mug of the week this week is going to an ex-user, Chris, who anchors 43. Listen, I thought this was great. So I've been made a good point on X. As always.
Who is going to build all this stuff? 1.5 million houses, airports, rallying stadiums. They're talking about their growth speech given by the Chancellor. Anyway, I'm struggling to find any announcement of bringing through a new generation of British builders to match the government's ambitions.
Now Simon's already got this money podcast mug so he can't win comment of the week. But Chris's reply was, I thought this is money was you and the boys are going to build the houses and Georgie will be project manager hashtag fix the world. I like that. I like that. Could you not leave when I was about six? We had an extension on our house and I
I wanted to be a bricky when I was younger, so I'm happy to hand over the project management to you or Simon. I'll get my hands dirty and I want to be a bricky. Okay, well, I did build a Barbie dream house on Christmas Day and I still got all of my fingers and my hands are still in use and I didn't swear the house down and it actually went weirdly smooth. Three and a half foot by five and a half foot. I'm ready to scale up. I'm ready.
Awesome. Awesome. You know, I dream team, right? So Simon is the project manager. That's great. That's great. There's a, there's a mug winging its way. Although I have to say a bit disappointed with the lack of sucking up to us. You know, I expect a little bit more, you know, Simon loves that. We love, we love reading about how amazing we are. You know, so next time on your X, if you could use some of your characters just to say just how amazing we are and then get your comment in underneath that, that would be great.
I'll come and shout at me if you want, I don't mind. Well, either way, that too, but you're not going to win a mug. We might do if it's a really good shout. But call out, though, quickly, Lee, before we depart, because we would love to get more comments. I don't have to be questions. I mean, questions, it's great opportunity for you to get your question answered. But if you just want to have a rant or a comment or anything and win a little mug and they are very good, I've got one in my hand right now, Tink Tink. They can hear that. Can't hear it. What are you talking about? Tink Tink.
No, I can't hear it. Okay, if you want to win this mug, I can't let louder or I'll smash it and then I'll have to win a mug. What do you have to do, Lee? Yeah, listen, we love more questions from our listeners, more comments and more feedback, all of those kind of things, podcasts, this is money.co.uk, comments, feedback and all that kind of thing. Also, you'll be in the hat for a mug.
And that is it. You can keep up to date with all the latest breaking money. You just go to this is money.co.uk or download the app. I've said about comments and questions related to the podcast for the team, but if there's anything that you'd like them to look into, anything specifically, do an article about it, do an investigation, whatever.
editor at this is money.co.uk. You can also access this is money. And we are reading those except me. I'm not. Yeah, we read everything towards everything that gets set over to us. We're always reading. And also, you can comment in the story where this podcast lives.
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