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Santander current account shake-up: Act now

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26/10/2020
From tomorrow, Santander will double the monthly fee on the 123 Lite current account while the cashback categories will also be tweaked. Here's what you need to know and alternatives to consider.

In July, Santander announced more changes to its 123 current accounts to take effect on 27 October – the third tweak this year affecting millions of customers.

Here’s what’s changing from tomorrow:

  • 123 Lite current account fee to double from £1 to £2 a month (there’s no change to the 123 current account so it will continue to cost £5 a month)
  • The cashback categories on the 123, 123 Lite, private and select current accounts will change. Water bills currently attract 1% but this will increase to 3%.
  • Meanwhile, communication cashback on phones, broadband and TV currently attract 3%. This will change to 1% tomorrow.
  • There’s also a maximum £5 cashback rate for each the three categories, meaning a maximum of £15 can be earned each month.

123, private and select customers can earn 0.60% on in-credit balances of up to £20,000 (£119.60 per year maximum) and up to £180 a year in cashback on bills. This means they can earn up to £299.60 per year, though will need to pay £60 a year in fees.

For 123 Lite customers, they can earn up to £180 cashback on everyday bills each year, with an annual fee of £24 from tomorrow.

Where now for current account rewards?

Rachel Springall, finance expert at Moneyfacts, said: “As with any current account it is vital for consumers to check the benefits they may have and ensure they are taking full advantage of what is on offer, especially if the account has a monthly fee.

“The changes from Santander will mean customers will earn less cashback on items like communication bills, so the overall package should be checked to see if it’s worth keeping for the monthly fee, which is rising.

“There are alternative reward current accounts available on the market, but the best for a consumer does depend on their spending and savings habit. Therefore, it’s wise to check all the T&Cs and work out some scenarios before moving to a new account.

“It’s quick and simple to switch accounts using the Current Account Switcher Service, so it’s no hassle to move accounts these days. If you’re unhappy with a package or service, then it might be time to move.”

Below are the alternative reward accounts you may want to consider:

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