Sorry for interrupting, this website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Learn more
Accept & Close

UK Current Accounts market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Current Accounts market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Products covered in this report

The focus of this Report is on retail current accounts, including packaged accounts for mass-market customers. The Report does not cover premium or private bank accounts targeted at the mass affluent-to-high net worth customers in detail.

The predominant type of pricing model for current accounts in the UK is the free-if-in-credit (or ‘free banking’) model. This is where the customer does not pay any direct fees for having the account if in credit, or for core services such as direct debits and cheques. Interest is usually charged on any money borrowed via an overdraft, which can be either ‘authorised’ or ‘unauthorised’.

Current accounts can be classified into various sub-types:

  • Basic current account – does not carry any charges as it is designed for those with a poor credit score. Customers can set up direct debits and are provided with a debit card, but the account typically does not come with an overdraft facility or in-credit interest.
  • Standard current account – based on the free-if-in-credit model, it does not carry any charges provided there are sufficient funds in the account to meet any payments made.
  • Student and graduate current accounts - variants of the free-if-in-credit model and may offer special features, such as an interest-free overdraft. For more detailed information on these products, please refer to Mintel’s Student Finance – UK, May 2017 Report.
  • Premium or packaged current account – usually involves the customer being charged a monthly fee in return for a range of additional benefits, such as travel insurance and motor breakdown cover.
  • Reward current account – usually offers a cash bonus or reward upon switching and offers cash rewards for paying in a set amount of money each month or for paying utility bills with the account.
  • Offset current account linked to a mortgage – links a current account to a mortgage by allowing the cash held in the current account to reduce mortgage debt. Instead of earning in-credit interest, the mortgage interest payments are based on a reduced debt value, allowing the debt to be paid off quicker.

Expert analysis from a specialist in the field

Written by Jessica Galletley, a leading analyst in the Finance sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Regulatory measures aim to increase competition in the market, ensuring established providers will have to work harder to attract and retain customers. Open Banking should make it easier for people to compare and identify products that are better suited to their needs. However, the biggest challenge will be encouraging people to review their arrangements in the first place. Jessica Galletley
Financial Services Analyst

What you get

What's included

Why buy from us?

Succeed

Our reports will provide you with market data, consumer research and competitive intelligence to succeed in your market.

Instant Access

Buy now and you'll have instant access to the information you need to make the right decisions.

Opportunities

Find out what's next in the markets that matter to you: where opportunities lie and what challenges you will face.

Trusted

A business Superbrand, Mintel is a source you can trust. We have been defining and refining the Market Intelligence mix since 1972.

Table of contents

  1. Overview

    • What you need to know
      • Products covered in this report
      • Executive Summary

          • The market
            • Number of current accounts rises by 2.1%
              • Figure 1: Estimated number of current accounts, 2014-17
            • Latest switching figures suggest a slowdown
              • Figure 2: Number of switches per month since launch of CASS, September 2013-May 2017
            • ‘Making banks work harder for you’
              • Companies and brands
                • Lloyds Banking Group has largest share of the market
                  • Figure 3: Current account providers (banking groups), by share of main and other current account market, May 2017
                • Challengers lead the way in increasing transparency around overdrafts
                  • Advertising spend falls by 35%
                    • Figure 4: Total above-the line, online display and direct mail advertising expenditure on current accounts and other related money-transmission services, 2012/13-2016/17
                  • Nationwide continues to be seen as most trusted brand
                    • Figure 5: Attitudes towards and usage of selected brands, May 2017
                  • The consumer
                    • Most hold a standard current account
                      • Figure 6: Type of current account held, May 2017
                    • Fee changes most likely to prompt people to review their arrangements
                      • Figure 7: Prompts to review current account arrangements, May 2017
                    • One in four uses their overdraft regularly
                      • Figure 8: Agreement with the statement ‘I use a current account overdraft regularly (ie each month)’, May 2017
                    • Convenience drives cross-selling among current account holders
                      • Figure 9: Attitudes towards your main current account provider, May 2017
                    • Main banking relationships likely to remain intact with Open Banking
                      • Figure 10: Willingness towards sharing financial data with different providers, May 2017
                    • What we think
                    • Issues and Insights

                      • Changes to current account terms prompt people to review their arrangements
                        • The facts
                          • The implications
                            • Consumers most likely to share data with their main bank
                              • The facts
                                • The implications
                                  • Open Banking will put pressure on providers to offer competitive overdraft charges
                                    • The facts
                                      • The implications
                                      • The Market – What You Need to Know

                                        • Number of current accounts rises by 2.1%
                                          • Online banking is the most frequently used banking channel
                                            • Latest switching figures suggest a slowdown
                                              • ‘Making banks work harder for you’
                                              • Market Size

                                                • Current account market grows with population
                                                  • Figure 11: Estimated number of current accounts, 2014-17
                                              • Channels to Market

                                                • Online banking is the most frequently used banking channel
                                                  • Figure 12: Use of different retail banking channels, July 2016
                                                • Branches remain important despite declining regular use
                                                  • Online banking has increased customer engagement
                                                      • Figure 13: Number of customer instructions for personal banking, 2001-16
                                                  • Market Drivers

                                                    • UK population continues to rise
                                                      • Figure 14: United Kingdom population mid-year estimate, 2008-16
                                                    • Latest switching figures suggest a slowdown
                                                      • Figure 15: Number of switches per month since launch of CASS, September 2013-May 2017
                                                    • Overdraft rates continue to rise despite base rate remaining at record low
                                                      • Figure 16: Monthly interest rate of UK monetary financial institutions sterling overdraft for households – Not seasonally adjusted, January 2012-April 2017
                                                    • Current account complaints fall by 35%
                                                      • Figure 17: Number of new complaints about current accounts to the FOS, 2013/14-2016/17
                                                  • Regulatory and Legislative Changes

                                                    • ‘Making banks work harder for you’
                                                      • Open Banking
                                                        • Service quality statistics
                                                          • Account-related ‘prompts’
                                                            • Unarranged overdraft charges
                                                              • CMA measures build on PSD2
                                                                • Payment Account Regulations take effect
                                                                  • Bacs Direct Debit consultation
                                                                    • New package account rules raise standards
                                                                    • Companies and Brands – What You Need to Know

                                                                      • Lloyds Banking Group has largest share of the market
                                                                        • Challengers lead the way in increasing transparency around overdrafts
                                                                          • Advertising spend falls by 35%
                                                                            • Nationwide continues to be seen as the most trusted brand
                                                                            • Market Share

                                                                              • Lloyds Banking Group has largest share of the market
                                                                                • Figure 18: Current account providers (banking groups), by share of main and other current account market, May 2017
                                                                              • Barclays is the biggest individual provider
                                                                                • Figure 19: Current account providers, by share of main and other current account market, May 2017
                                                                              • Santander sees switching numbers drop significantly
                                                                                  • Figure 20: Net gains of full account switches completed using CASS between 2015 and 2016.
                                                                              • Competitive Strategies

                                                                                • Competitive context
                                                                                  • Responding to regulatory changes
                                                                                    • Increasing transparency around overdrafts…
                                                                                      • …with entrants taking a different approach
                                                                                        • Reacting to the market environment
                                                                                          • Cutting rewards and benefits...
                                                                                            • …but challengers buck the trend
                                                                                              • Switching deals remain prominent among challengers
                                                                                                • The competitive environment
                                                                                                  • Partnering with fintechs
                                                                                                    • Demand for personalisation drives niche market propositions
                                                                                                      • Ethical banking
                                                                                                        • Students remain a key target market
                                                                                                          • Money management
                                                                                                            • Open Banking clouds the future for Atom Bank
                                                                                                              • Recent and pending launches
                                                                                                              • Advertising and Marketing Activity

                                                                                                                • Spend falls by 35%
                                                                                                                  • Figure 21: Total above-the-line, online display and direct mail advertising expenditure on current accounts and other related money-transmission services, 2012/13-2016/17
                                                                                                                • Nationwide maintains spending levels despite widespread cuts
                                                                                                                  • Figure 22: Top ten advertisers of current accounts and related money-transmission services, 2014/15-2016/17
                                                                                                                • Added-value accounts see biggest fall in advertising
                                                                                                                  • Figure 23: Advertising expenditure on current accounts and other related money-transmission services, 2014/15-2016/17
                                                                                                                • TV advertising accounts for three fifths of all spend
                                                                                                                  • Figure 24: Share of advertising expenditure on current accounts and related money-transmission services, by media type, 2016/17 (12 months to 30 April)
                                                                                                                • Nielsen Ad Intel coverage
                                                                                                                • Brand Research

                                                                                                                    • What you need to know
                                                                                                                      • Brand map
                                                                                                                        • Figure 25: Attitudes towards and usage of selected banking brands, May 2017
                                                                                                                      • Key brand metrics
                                                                                                                        • Figure 26: Key metrics for selected banking brands, May 2017
                                                                                                                      • Brand attitudes: Metro Bank seen as offering something different
                                                                                                                        • Figure 27: Attitudes, by brand, May 2017
                                                                                                                      • Brand personality: Co-op struggling despite ethical association
                                                                                                                        • Figure 28: Brand personality – Macro image, May 2017
                                                                                                                      • HSBC seen as irresponsible and only caring about profits
                                                                                                                        • Figure 29: Brand personality – Micro image, May 2017
                                                                                                                      • Brand analysis
                                                                                                                        • High-street banks are seen as accessible and reassuring
                                                                                                                          • Nationwide wins on service
                                                                                                                            • Metro Bank and First Direct stand out as being progressive
                                                                                                                              • Tesco brand bounces back from cyber attack
                                                                                                                                • Co-operative bank is becoming tired
                                                                                                                                • The Consumer – What You Need to Know

                                                                                                                                  • Most hold a standard current account
                                                                                                                                    • Fee changes most likely to prompt people to review their arrangements
                                                                                                                                      • One in four uses their overdraft regularly
                                                                                                                                        • Main banking relationships likely to remain intact with Open Banking
                                                                                                                                        • Current Account Ownership

                                                                                                                                          • Majority own a single current account
                                                                                                                                            • Figure 30: Number of current accounts owned, 2013-17
                                                                                                                                          • A quarter have a joint account
                                                                                                                                              • Figure 31: Current accounts held jointly with someone else, May 2017
                                                                                                                                          • Ownership by Type of Current Account

                                                                                                                                            • Most hold a standard current account
                                                                                                                                              • Figure 32: Type of current account held, May 2017
                                                                                                                                            • Reward accounts grow in popularity
                                                                                                                                              • Equal split between packaged and reward accounts
                                                                                                                                                • Figure 33: Types of fee-paying/paid for account, May 2017
                                                                                                                                            • Prompts to Review Current Account Arrangements

                                                                                                                                              • Loyalty means people are likely to forgive account changes
                                                                                                                                                  • Figure 34: Prompts to review current account arrangements, May 2017
                                                                                                                                                • Fee changes most likely to prompt people to review their arrangements
                                                                                                                                                  • Less sensitivity to changes in rewards or discounts
                                                                                                                                                    • Multiple account holders more sensitive to changes
                                                                                                                                                      • Figure 35: Prompts to review current account arrangements, by number of current accounts, May 2017
                                                                                                                                                    • Young men are prime targets for current account advertising
                                                                                                                                                      • Figure 36: Prompts to review current account arrangements – ‘Seeing an advert for a more competitive product’, by age and gender, May 2017
                                                                                                                                                    • Nearly a third would be prompted by three or more reasons
                                                                                                                                                      • Figure 37: Repertoire of prompts to review current account arrangements, May 2017
                                                                                                                                                  • Use of and Attitudes towards Overdrafts

                                                                                                                                                    • One in four uses their overdraft regularly
                                                                                                                                                        • Figure 38: Agreement with the statement ‘I use a current account overdraft regularly (ie each month)’, May 2017
                                                                                                                                                      • Overdraft usage varies by provider
                                                                                                                                                        • Figure 39: Agreement with the statement ‘I use a current account overdraft regularly (ie each month)’, by main current account provider, May 2017
                                                                                                                                                      • 71% know their current account overdraft charges
                                                                                                                                                        • Four in five users think competitive charges are important
                                                                                                                                                          • Figure 40: Usage and attitudes towards current accounts, May 2017
                                                                                                                                                      • Attitudes towards Main Banking Relationship

                                                                                                                                                        • Convenience drives cross-selling among current account holders
                                                                                                                                                            • Figure 41: Attitudes towards your main current account provider, May 2017
                                                                                                                                                          • Two-thirds trust their bank over others
                                                                                                                                                            • Difficulty finding suitable products mean people turn to their bank
                                                                                                                                                              • Figure 42: Agreement with the statement – ‘I find it difficult to work out which banking products are most suitable for my needs’, by age, May 2017
                                                                                                                                                            • Younger parents more likely to go straight to their main bank
                                                                                                                                                              • Figure 43: Attitudes towards current accounts – CHAID – Tree output, May 2017
                                                                                                                                                            • Nationwide and HSBC customers are most likely to turn to their bank as first port of call
                                                                                                                                                              • Figure 44: Attitudes towards your main current account provider – All answering ‘Yes’, by main current account provider, May 2017
                                                                                                                                                          • Attitudes towards Data-sharing

                                                                                                                                                            • Three in four are happy to share their data with their main bank…
                                                                                                                                                              • … but one in five is concerned
                                                                                                                                                                • Figure 45: Willingness towards sharing financial data with different providers, May 2017
                                                                                                                                                              • New banks less trusted than other banks
                                                                                                                                                                • PCWs best placed for data-sharing
                                                                                                                                                                  • Millennials equally likely to share with a tech firm as a new bank
                                                                                                                                                                      • Figure 46: Willingness towards sharing financial data with different providers, May 2017
                                                                                                                                                                  • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                      • Abbreviations
                                                                                                                                                                        • Consumer research methodology
                                                                                                                                                                          • CHAID Methodology