Are current account switching offers getting better or worse? - Which? News (2024)

Current account switching offers can be a simple way to earn up to a few hundred pounds, but so far this year we've spotted two periods with no deals on the table for those itching to move.

To understand if deals are drying up, we’ve looked at bank switching offers from the past 12 months. To check how generous banks have been, we've looked at data going back over five years.

Read on to find out if switching offers are becoming rarer and if the bonus available is as good as it used to be. Plus, we explain how tweaks to terms and conditions on incentives could put an end to 'serial switching'.

Are we seeing fewer switching offers?

So far this year, there have been two periods without any switching offers - at the start of February and at the end of April.

But our research indicates that these dry spells are typically short-lived. Like buses, switching offers can quickly appear all at once. For example, at the start of May, no switching bonuses were available, but by the end of the month five different banks were offering them.

July 2023 was a particularly busy month, with eight providers offering switching incentives at some point.

Caitlyn Eastell, spokesperson at financial data website Moneyfacts, explained: 'The availability of these types of perks can fluctuate, depending on when banks and building societies expect consumers to be actively looking to switch their deal. However, providers may also choose to reintroduce switching offers to draw in new customers.'

The trend over the last five years

We also analysed the number of providers with switching offers during the same five-month period over the last five years (January to the end of May) and found that, on average, there are slightly more providers offering switching incentives this year compared to last year. On average, over four providers offered a switching incentive each month.

The average number of providers offering switching incentives peaked in 2022, with over six providers offering a switching bonus each month. One reason for the abundance of offers in 2022 could be the impact of the pandemic. During 2021 and 2020, the average number of providers offering switching bonuses each month dropped to two and just over three, respectively. As we emerged from the pandemic, banks likely increased their switching incentives to make up for lost time.

• Find out more:best bank accounts in 2024

Are switching offers getting better or worse?

We analysed switching offers from January to the end of May, going back to 2019, and found that the average value of a switching offer has increased.

So far this year the value of the average switching incentive is £169, up from £148 in 2019, but lower than last year when it was £190. However, when adjusted for inflation, the real value of bank switching offers has actually dropped since 2019.

As well as considering the market generally, we investigated how individual providers’ switching incentives changed over time.

First Direct, a Which? Recommended Provider, has seen the most dramatic increase in its largest switch incentive since 2019, rising from £125 to £175. Other providers have increased its bonuses by smaller amounts. For example, NatWest’s top switch incentive rose from £175 in 2019 to £200 in 2024.

Who offered the most valuable switching offers?

The top upfront cash incentive in the last year was £200. You had several options to gain this top incentive, with HSBC, NatWest, RBS, Ulster Bank and Nationwide Building Society all offering a £200 lump sum for switching. In fact, we saw a £200 switching bonus in 10 of the last 12 months.

There were also opportunities to earn more than this, if you were willing and able to meet additional criteria.

• HSBCoffered an upfront bonus of £125 and an additional £80 for meeting additional criteria.
• TSBoffered an upfront bonus of £150, with the chance to earn £10 cashback per month for six months if further conditions were met.
• Halifaxprovided £150 upfront and a possible £75 if you met minimum spending requirements over three months.

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The banks most likely to have switching offers

We analysed the providers that offered switching incentives in the last 12 months and found that First Direct was the most consistent, offering a cash incentive in 10 out of the last 12 months.

High street banks completed the top six, with Lloyds Bank leading the chasing pack with incentives available in eight months.

NatWest, Royal Bank of Scotland, TSB and HSBC each offered incentives in six of the last 12 months.

In the past year, challenger banks were generally the least likely to offer a lump sum cash switching bonus. Chase, Metro Bank, Monzo and Starling Bank didn’t offer a cash incentive for switching.

Of course, there's more to consider in a bank account than just cash-switching offers, such as the customer service and the quality of the product on offer.

Starling Bank, for example, has been a Which? Recommended Provider for several years. It has achieved five out of five stars for customer service and an excellent product score, 74%, for its current account in our latest survey. Its current account offers fee-free spending abroad and 3.25% AER on balances up to £5,000.

• Find out more:challenger banks explained

Terms and conditions clampdown

When analysing switching deals over time, we've also observed that the terms and conditions from some providers have gradually become stricter.

For example, in 2021 you could qualify for a switching offer with First Direct by being a new current account customer, with some restrictions if you were a HSBC or M&S current account holder. Now the incentive is only available to those who have never had any financial products with First Direct.

Similarly, the three previous Santander switching offers required you to deposit £1,000, but the current offer requires a deposit of £1,500.

Lloyds Bank's recent switch offer now requires you to set up three direct debits, compared to only two previously.

'Banks are trying to lock in customers for longer'

Alastair Douglas, CEO of credit report provider TotallyMoney, explained: 'The banks [are] now fully aware of serial switchers, they’re trying to lock in customers for longer periods of time, or by making offers more complicated.

'One provider is currently offering 10% interest on up to £1,000 for one year [Virgin Money], while others require customers to use their card multiple times, login to the app and set up direct debits. We’re also seeing some offers lasting just a few weeks, as they grab the headlines just before being pulled.'

Switching current account in 2024

After a quiet April and start to May, we currently seeing a wide range of switching offers.

First Direct, Lloyds and Santander are offering £175 to switch, while TSBis offering £100 and a further £60 in cashback. Nationwide is also offering £200 to members (who currently do not use their Nationwide account for their everyday banking) to switch.

However, if providers continue to make offer terms and conditions stricter, you may find fewer bonuses that you are eligible for, or may need to jump through a lot more hoops to qualify. Be sure to check the terms and conditions before switching to ensure you are eligible.

• Find out more: for the latest switching deals and the ins and outs of bank switching, head to our guide on how to switch your bank account.

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