Halifax cash bonus woos bank switchers

Halifax and Santander have increased their dominance in the competition for new current accounts, with more than half of all bank movers joining the two in the third quarter of last year.

The latest data from the Payments Council revealed that Halifax, part of Lloyds Banking Group, poached 29 per cent of all customers who changed provider under a government-backed initiative to make switching easier.

Spanish-owned Santander, the largest of the UK's so-called "challenger" banks, accounted for 26 per cent of all switchers during this period.

A number of banks and building societies have introduced incentives to attract new customers under the free current account switch service, which was introduced in 2013.

Halifax was among the first to offer a cash reward for those who switched, and this February increased its signing-on bonus from £100 to £125 - a payment surpassed by Clydesdale and Yorkshire banks, which offer £150.

Like Nationwide - the only other provider to attract large numbers of net switchers - Santander offers relatively high interest on current account balances.

Notwithstanding a year-on-year increase of 7 per cent in the number of customers moving providers in the 12 months to March 31, overall rates of switching remain low. The Payments Council reports that 1.1m customers switched during this period, representing only a tiny share of the near-50m total.

"Although more people are voting with their feet and looking for a more suitable banking relationship, the vast majority are refusing to budge from their existing provider," said Andrew Hagger, personal finance expert at Moneycomms.

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation