The claim
“You’re more likely to be divorced than to change your bank account.”
Shadow chancellor Ed Balls, Sunday 8 July 2012.
The background:
Ed Balls thinks Brits love their banks more than their spouses.
The shadow chancellor was speaking about reforms Labour wants to introduce to the banking sector in the wake of the Barclays Libor rate-rigging scandal.
The party wants to break up the big five banks, sell off branches and make it easier to switch bank accounts.
Speaking to the BBC’s Andrew Marr, he said: “It’s very difficult to change bank accounts. People do it every 26 years. You’re more likely to be divorced than to change your bank account, and that’s partly because it’s difficult.”
FactCheck’s looked into whether we’re really more ready to dump our other half than our bank.
The analysis:
The 26 year time limit Mr Balls says we give our bank accounts is taken from a report released last September by the Independent Commission on Banking. It said that in 2010, that was how often we move current accounts.
Figures uncovered by the Office for National Statistics found that, on average, marriages lasted 11.4 years before ending in divorce. Considerably less than 26 years of banking loyalty.
But all that tells us is that marriages ending in divorce did so in less than half the time it took people to change their bank accounts.
What it doesn’t say is how likely we were to divorce in the first place, or indeed how likely we are to dump our bank managers for a new one.
There’s another slight hitch when it comes to what Mr Balls is saying. He’s talking about how likely one is to be divorced, instead of how likely one is to get divorced. He’s referring to a situation as it exists; the latter option refers to a potential scenario in the future.
To know the likelihood of being divorced, we’d need to know the number of people who have ever been divorced.
As far as we can find, there are no figures which tell us that. The British Household Population Survey doesn’t ask whether anyone’s ever been divorced, and neither does the Census. The Office for National Statistics collects figures on divorces taking place within each year, but adding all those up would by no means be an accurate indicator of the number of people who have ever been divorced.
Likewise, we’d need to compare that with the number of people who have ever switched accounts. Again, it doesn’t appear that those figures are available.
FactCheck’s taken the liberty of looking into how likely one is to get divorced, even if that’s not quite what Mr Balls said. A study for the ONS in 2008 suggested that over a lifetime, there was a 45 per cent risk of a marriage ending up in divorce.
But we’ve come to another stumbling block, which is that the comparable figure for changing bank accounts isn’t available.
So FactCheck’s looked at the number of marriages which ended in divorce in 2010, and compared that with the number of customers who changed bank accounts in the same year.
In 2010, according to the Office for National Statistics, 1.1 per cent of marriages broke up.
But the same year, the rate at which customers switched personal current accounts was 3.8 per cent, according to the Independent Commission on Banking.
Which meant that for the latest available figures, people were more likely to change accounts than to divorce.
The verdict:
Based on latest figures available, Mr Balls’ claim that you’re more likely to be divorced than to change bank accounts can’t be stood up.
What he’s done is compare how long it takes for people to get divorced with the amount of time people tend to stay with a bank account. The problem with that is that there’s an assumption that everyone will eventually get divorced, which of course, they don’t.
Likewise, the British Banking Association (BBA) point to other factors which make the analogy far from simple: for example, that you can switch accounts without leaving your bank, or that you can have multiple accounts at one or many banks. That’s not something that can be said of husbands or wives.
And there’s other things which influence our behaviour in banks that we wouldn’t get away with at the registry office. As a BBA spokesman pointed out to FactCheck, we may leave an old bank account open when choosing a new one as a fallback position.
That kind of behaviour certainly wouldn’t pass the “any lawful impediment to marriage” test up at the altar, FactCheck suspects.
It does seem that once you begin drawing comparisons, it’s hard to stop. But if the bank manager points, for example, to the OFT report which says “evidence suggests that existing consumers often start looking for a new current account only when things go wrong”, we’d advise against couples thinking of splitting up taking that as being an implied comment on their relationship. It isn’t.
Divorce and bank accounts make an interesting analogy, Mr Balls. Interesting, but not quite the bedfellows you suggest.
By Fariha Karim
