With Nationwide members soon to receive a £100 loyalty bonus, customers at other banks may ask if they will receive a similar windfall. The building society is rewarding more than four million members with the free cash in the latest instalment of its Fairer Share Payment initiative.
Meanwhile, Santander has tempted new customers with a £180 payment to switch to a current account with them. This has prompted speculation about whether other financial institutions will bring in cash bonuses in efforts to retain and attract customers.
Commenting on the trend, Aaron Peake, personal finance specialist with the free credit score app CredAbility, said: “I think it’s fair to say this move from Nationwide will put pressure on other banks to show their loyalty too.
“Customers are fed up with rising fees, lower interest rates on savings, and limited perks, so when a building society like Nationwide gives something back, it doesn’t go unnoticed.” Mr Peake suggested that some of the major banks may bring in similar incentives, particularly those being scrutinised for their record profits.
Nationwide distributes the Fairer Share Payment to share profits among its patrons. Mr Peake said: “If one or two start doing it, it could spark a new trend in loyalty bonuses, or at least seasonal one-offs. But we shouldn’t expect them all to suddenly hand over money.
Traditional banks like Barclays, HSBC, Lloyds and NatWest are more likely to compete through switching incentives rather than paying out to existing customers.” He gave the examples of TSB and Santander who have previously offered bonus payments.
However, Mr Peake urged caution against switching banks just because of the attraction of some free cash. He explained: “Sometimes these offers come with hoops to jump through, like having to pay in a set amount each month or setting up a minimum number of direct debits.
“You should also check what ongoing benefits the account offers, like cashback, interest on your balance or fee-free overdrafts. A one-off bonus is nice, but it doesn’t always mean better value long term.”
Mr Peake also encouraged bank customers to search for better deals on the market. He said: “If you’ve been with the same bank for a long time and never received a perk or bonus, now’s a good time to shop around.
“At the moment, some of the best current account deals are offering £175 or more to switch. These can be easily set up in just seven days through the Current Account Switch Service.”
Co-op Bank currently has a £175 switch offer for new and existing current account clients. First Direct is also offering £175 for switching to them.
