Halifax gains 22,000 current account customers after £100 summer sweetener

Current account switching bounced back in the last three months of 2020 as customers took advantage of three-figure switching bonuses from Britain’s biggest banks.

Some 189,000 accounts were switched through the official seven-day service between October and December, with November seeing the highest number of switchers at 80,000 since March 2020.

Meanwhile, figures for individual banks – which lag behind and show July to September data – reveals that stablemates Halifax and Lloyds benefited from the relaunching of current account switching bonuses, with both banks gaining thousands of customers. 

The only other banks to show a net volume of current account switchers are Starling, Monzo, Triodos and Bank of Scotland. 

Halifax boosted its customer numbers through the switch service for the first time since 2018

Smartphone-only banks Monzo and Starling were the biggest winners through the first nine months of last year according to the data, which measures usage through the official seven-day switching service. 

It found a rise of around 50,000 on the number of switchers in the third quarter of 2020 and the number was almost double the 98,000 who switched during the height of the first coronavirus lockdown between April and June.

The latest figures mean 7million people have now switched since the current account switch service launched in 2013, but this is just 1million more than the number of people who switched energy supplier last year alone.

November likely saw the highest number of switchers as consumers sought to take advantage of switch bonuses which came to an end that month, with Lloyds and Royal Bank of Scotland both offering £100 to customers who switched by then.

The disappearance of those offers, plus another £125 welcome bonus from HSBC, meant switching fell in December to levels last seen before bank account bribes returned to the market in early August.

The pent-up demand from consumers for decent current account switch bonuses was also evident in the latest figures revealing the winners and losers between July and September.

Halifax’s £100 switch offer, which was the first to be announced by a major bank since the coronavirus pandemic struck the UK in March, saw it gain more than 22,000 net customers in the third quarter of 2020.

It was the first time the bank had gained a net number of new accounts since the middle of 2018, while Lloyds Bank’s £100 switching offer announced in September saw it pick up 8,000 net new accounts.

Jon Ostler, chief executive of the personal finance comparison site Finder, said: ‘Halifax topping the switching charts is an indication of how successful switching incentives can be in the short term. 

The £100 offer for their Reward and Ultimate Reward current accounts which ran from early August until September was one of very few incentives available at the time and was also the first switching reward brought to market since coronavirus took hold.

‘There appears to have been a lot of pent up demand to switch, and Halifax have done well to capitalise on this.’

Current account switching bounced back thanks to three-figure switch bonuses returning

However, the same could not be said for HSBC and Royal Bank of Scotland, which both lost thousands of customers in the three-month period despite launching three-figure incentives, although more likely applied to switch in October and November.

The continued slide by RBS means it has now lost a quarter-of-a-million accounts since switch service figures began being published in 2014, despite launching numerous switch bonuses in that time.

Meanwhile Nationwide Building Society also lost a net 928 customers between July and September, the first time it had seen a net loss of customers in a quarter since records began.

The slight exodus likely resulted from the building society’s decision to slash the interest rate on its FlexDirect current account, which had been the biggest winner in the current account competition, from 5 per cent to 2 per cent.

And the rise of the digital banks also continued unabated, with Starling gaining another 12,600 net accounts and Monzo just over 9,000. 

Both gained more than 20,000 customers between April and September, likely from Britain’s biggest banks, despite offering no short-term bonuses themselves.

This post first appeared on Dailymail.co.uk