Banks slash cash rewards and switching offers for customers

3 October 2018
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Customers looking for a good current account deal will struggle as banks have significantly cut cash rewards and switching offers over the past six months.

This week Halifax cut the monthly reward payment on its Reward Account from £3 to £2.

Several other big brands have cut down the sweeteners on offer in recent months, including NatWest/RBS, which removed its £100 switching incentive in July.

TSB also axed its reward payment of up to £10 a month in June, while First Direct ditched its £100 cash reward and replaced it with alternative gifts instead in April.

According to money-saving website Moneyfacts, the latest cut from Halifax is making providers rethink their incentives in an attempt to attract those savers looking to switch.

However, Barclays has made the decision to bring back its double rewards for switchers on the Blue Rewards add-on after it was withdrawn in June.

Rachel Springall, finance expert at Moneyfacts.co.uk, says: “Consumers looking for something extra from their current account may want to take this latest shake-up as an opportunity to shop around, especially as it’s quick and simple to switch using the Current Account Switch Service (CASS) with most brands.”

She says there are other ways for consumers to get some free cash out of their bank account, away from current account switching sweeteners: “For instance, The Co-operative Bank pays £4 net per month when customers meet certain eligibility criteria, plus up to £1.50 per month on top when using their debit card, which totals £66 in the first year."

She adds: “It’s clear to see that the free-cash cutdown isn’t an anomaly, with it happening across various brands over the last six-month period, and it’s possible that providers will continue to rein in their rewards as we enter a period of economic uncertainty.”

“While one provider has gone the other way recently, there’s no telling whether this is the start of a more positive trend in the market or just a one-off. With this in mind, any customers who have yet to take advantage of switching incentives may want to act quickly before more cuts take place.”

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