A third of Britons stick with the same bank for most of their lives, potentially wasting money

If you’re one of the 70 per cent of Britons who bank with the 'big four' – Barclays, HSBC, Lloyds TSB or Natwest/RBS – you could be wasting hundreds of pounds a year and might need to switch accounts, even if it's to another offered by the same bank.

Interest rates and bank charges are the two main issues.

The big four and some smaller banks have current accounts that pay as little as 0.1% in interest. This compares with other banks that offer up to 5%.

Your bank may even have other accounts paying much more than you currently get, but if you don't switch to one, you won't get the higher rate.

Charges for going overdrawn can also be uncompetitive; if you tend to spend more than your pay cheque each month, you suffer doubly.

Changing your bank account isn't something you can do at the click of a button, but if you follow this guide, it could be less painful than you imagine.

1. Apply for the new account

Many banks let you download application forms online, or complete many of your details using an online form. Alternatively, just phone the bank and ask for one to be sent in the post.

If you find the form or online application confusing, call the bank and ask them to guide you through. It's better than returning it filled in incorrectly and possibly suffering delays.

2. Provide financial and identification details to the new bank

You will be asked to provide proof of identification and address by the new bank. This is usually a passport or driving licence and a recent utility bill, pension statement or council tax bill.

You may also be asked for details of income such as recent pay slips or tax statements. Credit agreements such as those with mortgage or credit card companies may also be requested.

3. Credit search

Often, the new bank will conduct a credit search (beware, though, the more credit searches you have done, the more difficult it can be to obtain credit).

If you’re turned down for credit reasons but feel this is unwarranted, you can try to get your credit rating changed (see help box).

4. Switching direct debits and standing orders

Organising the switch with the potentially numerous companies and organisations we have regular payment and debits agreements with is one reason many people can't face changing banks.

However, if you sign a switching mandate (you can simply ask the new bank for one), the new bank will act on your behalf.

The companies are then instructed to take payments from the new account, without you having to remember to contact each one individually and set them all up again.

5. Regular payments into your account

Contact all those organisations that pay regular sums into your account. This will include companies that pay your salary, pension and share dividends.

6. Agree an overdraft

Organising the transfer of payments may take a number of weeks. To cover yourself in case an overlap results in debits being made without there being money in the new account to cover them, agree an overdraft.

Nearly all banks will now allow you to go at least £500 overdrawn without incurring charges, as long as this has been agreed beforehand.

7. Tax

If you do not pay tax, ensure you complete form R85 so that the interest is paid tax free.

8. Close the old account

Your new bank will let you know once all arrangements have been made to transfer payments, and you can then close your old account.

It’s important you do so as if the account is left 'active', there is a potential security risk regarding indentity and credit fraud.