Thousands of UK current account-holders are leaving money management to chance by failing to check their balances regularly, according to the Royal Bank of Scotland (RBS). To help account-holders gauge their knowledge gap, RBS has partnered with the University of Bristol’s Personal Finance Research Centre to develop an online tool called the ‘Account Quotient’.
A potential 7.4 million account-holders in the UK are leaving statements unopened or unread on a monthly basis, and a further 23 per cent who do claim to check their statements admit to not doing so regularly, according to extensive research conducted by RBS among 2,474 UK current account-holders from all the main high-street banks.
This high figure is not so surprising since the survey also identifies that more than one in five (21 per cent) of account-holders is burying their head in the sand and failing to check their balance at least once each week, with just a conscientious 16 per cent managing to keep track of finances on a daily basis.
Despite a failure to check statements, the average current-account holder is still able to keep track of their account balance at any time within a £20 error margin. This is perhaps explained by the impressive 61 per cent of UK account-holders who use online banking to check their balance at least once each week.
Those using online banking were also more likely to be able to quote their exact balance. 21 per cent of respondents who knew their exact bank balance were online bankers, compared to 18 per cent who were mainly in-branch bankers. Older respondents were more likely to know the precise amount in their bank at any time, with more than half (54 per cent) of those able to do so aged 56 or over, compared to just 17 per cent of those under 25.
The RBS Account Quotient research also reveals the latest trends in terms of banking preferences. The research showed that more than half of account-holders (54 per cent) visit their bank in person once per month or less frequently, while just 17 per cent make a weekly visit to their high street branch. However, branch contact is still highly valued by many customers (73 per cent) who cite being able to phone their branch directly as the most important feature of their account.
When it comes to online banking however, usage is far more frequent with almost two thirds of account-holders using the internet to keep up-to-date with their account online and 17 per cent actually logging on to their account every day. Interestingly, account-holders aged 55 and over were the most likely to bank online, with only 12.5 per cent claiming not to bank online at all, compared to a UK average of 22 per cent. Furthermore, those aged 55 and over are also more likely to check their balance online every day with a quarter (25 per cent) doing so, compared to the national average of 17 per cent.
Telephone banking proved to be the least popular method of keeping up-to-date however, with 41 per cent of account-holders claiming never to use telephone banking at all; interestingly, younger respondents aged 16-18 were slightly more likely to bank via telephone than older account-holders.
Almost two thirds (63 per cent) of account-holders admitted to being ‘completely reliant’ on their current account, whilst 88 per cent agree that it would be ‘extremely difficult’ to manage their money without a current account. The research findings also suggest that perhaps cash is no longer king, with half of account-holders (50 per cent) preferring to pay for items using their current account debit card such as Maestro, compared to 27 per cent who prefer to use cash. Cheques have become the least popular payment method with just 1.5 per cent still opting to pay in this way.
To aid the potential 49 million Britons who are not making the most of their current account, The Royal Bank of Scotland has partnered with the Personal Finance Research Centre at the University of Bristol to create the Account quotient (AQ). The AQ provides a benchmark for assessing your account savviness and will allow you to identify areas which require improvement. The AQ is an easy to use online tool, which generates a score in the same way as an Intelligence Quotient (IQ).
Once you have calculated your AQ, you will receive practical tips to on how to use your account more effectively. The average AQ of a UK account-holder is 29 out of a possible 44, suggesting substantial room for improvement.
Adele Atkinson, Research Fellow at the University of Bristol’s Personal Finance Research Centre, adds, “I have been impressed with the continued commitment RBS has shown to financial education through their face2face with finance initiative (with young people) and so I was happy to help them work on a new tool to ensure consumers get the most from their bank accounts. My work for the FSA on their ‘Financial Capability Baseline Research’ shows clearly that many people are not good at choosing appropriate financial products. This has highlighted the need for accessible consumer support and education, and tools such as the AQ are certainly a step in the right direction.”
To take the AQ, visit www.rbs.co.uk/accountquotient