Nationwide’s £200 switching bonus attracted a record 163,000 customers, leaving out other banks

Nationwide may have spent up to £39 million on £200 switching bonuses to acquire new current account customers in just three months, new figures suggest.

Britain’s largest building society has sucked in 163,363 people who switched bank accounts in the last three months of 2023, according to the Current Account Switch Service (CASS).

This is better than the previous largest quarterly net profit of 111,941, also from Nationwide, in the last three months of 2022.

At the end of 2023, Nationwide paid a £200 switching bonus to new members. The cash bribes were clearly a big draw for many customers.

Switching rush: Nationwide attracted more than 163,000 more customers than it lost in the last three months of 2023, fueled by its attractive £200 switching bonus, which encouraged customers to sign up

On 21 September 2023, Nationwide launched a switching incentive offering new members £200. This was the biggest giveaway on the market at the time, as NatWest had withdrawn its £200 bid not long before.

Nationwide’s transfer agreement was subsequently withdrawn on December 21, 2023.

The huge £200 cash bribe in the last three months of 2023 blew Nationwide’s competitors out of the water. At the time, Lloyds Bank, TSB and First Direct paid switching bonuses, but none paid more than £175.

Andrew Hagger, founder of financial website MoneyComms, said: ‘The UK’s largest investment company has gained 196,260 customers thanks to a £200 switching bonus lasting four months from September 21, 2023.

‘Throwing attractive cash incentives to potential new checking account customers certainly works initially, but how many of those customers stick around?’

Only two other banks, Barclays and Lloyds, gained more customers than they lost through switching in the final three months of last year.

Barclays won 12,823 more than it lost, while Lloyds Bank added just 5,800 more customers.

Meanwhile, other banks were hemorrhaging customers, with many jumping to Nationwide.

Natwest and Halifax each lost over 40,000 more transfers than they gained, while Santander had over 34,000 net transfers.

Hagger said that “consumers are eager to switch for the next freebie – especially as people are still feeling the pressure of higher bills.”

The latest CASS figures show that 320,364 switches took place in the first three months of 2024.

March was the busiest: 132,282 customers switched current accounts.

Total number of switchers registered by major banks in the last three months of 2023
Bank Gain To lose Net profit
Nationwide 196,260 32,897 163,363
Barclays 49,495 36,672 12,823
Lloyd’s Bank 49,479 43,679 5,800
Starlingbank 10,053 11,765 -1,712
Bank of Scotland 2,137 5,161 -3,024
Pursuit 3,982 7,037 -3,055
HSBC 56,213 59,476 -3,263
Monzo bank 11,217 16,553 -5,336
Virgin money 1,902 10,494 -8,592
TSB 18,236 29,153 -10,917
RBS 1,393 13,014 -11,621
Santander 7,403 41,984 -34,581
Halifax 6,720 47,864 -41,144
NatWest 7,601 50,783 -43,182
Credit: CASS

Why are there so few switching bonuses now?

There are currently no switching bonuses on the market.

Several banks have withdrawn their free cash offers this month, including HSBC, NatWest, Santander and First Direct.

This week, First Direct withdrew its £175 free cash offer, which launched on March 26. On 5 April, NatWest and RBS withdrew their £200 free cash offer and Santander canceled the £185 offer, which was launched on 18 March. HSBC on April 10 withdrew its £100 offer, which was launched on March 12.

At the end of March, Lloyds Bank withdrew its £175 free cash transfer offer, which had been available since mid-February 2024.

In January, TSB withdrew its offer of £125 free cash, and The Co-operative Bank withdrew its offer of £100.

Rachel Springall, financial expert at Moneyfacts, said: ‘Consumers will notice that the free switching benefits offered by providers have disappeared. These benefits come and go at different times of the year, but it will be disappointing news for those who were hoping for a free cash boost when switching via CASS.”

On the return of switching bonuses, Springall said: ‘The current account market will undoubtedly see a return of free money offers, but these tend to return when banks and building societies want to attract new customers, or even when they expect consumers to do so. are actively looking to move their deal, for example at the start of a new year.’

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