Fifth of parents ‘say having children prompted them to consider bank switch’

One in five (21%) parents with young children say having a baby made them rethink their banking provider, rising to a quarter (26%) of parents earning more than £75,000, a survey indicates.

The survey of parents with children aged three years old and under also found that nine in 10 (91%) reassessed their finances ahead of starting a family.

The reset is being driven by immediate pressures on household budgets, with savings (65%), budgeting (57%) and household bills (45%) the most commonly reassessed areas, according to the research, commissioned by the Current Account Switch Service (Cass).

A third (34%) of parents highlighted feeling more pressure financially since having a child.

Two-fifths (40%) of parents said they have cut back on non-essential spending since having a child, and nearly three in 10 (27%) said they have dipped into savings to cover everyday costs. Over a fifth (22%) of new parents had received financial support from family members or friends.

Those earning over £75,000 were the most likely to consider changing their banking provider, as well as being the most likely to cut back on non-essential spending. Some 45% of people in this income level had cut spending on non-essentials.

They were also particularly likely to report that childcare costs significantly affected their budget, with 36% agreeing compared with an average of 30%.

Four in ten (40%) new parents said rewards or cashback now matter more to them, while 37% prioritise a smooth mobile banking app. About a third (34%) said they are looking for budgeting tools, while the same proportion (34%) said good customer service has become more important since having a child.

A fifth (21%) of new parents admitted they are more likely to put off paperwork during early parenthood.

John Dentry, product owner at Pay.UK, owner and operator of Cass, said: “Becoming a parent is a big financial reset for many. Our research shows parents aren’t just tightening belts, they’re actively reassessing how their money, and their bank account, works for them.

“But when life gets busy, admin tasks often fall down the list, and that’s when people risk missing opportunities to make changes that could really help such as switching to a current account that better fits their needs.”

Cass, which completes current account switches in seven working days and ensures payments are automatically moved to the new account, commissioned Censuswide to carry out the survey among 2,000 people with children aged up to three years old in December.

As well as consumers, SMEs (small and medium-sized enterprises) with a turnover of up to £6.5 million, small charities with an annual income of less than £6.5 million, and small trusts with a net asset value of less than £6.5 million can switch their current account provider using the service.