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Switching bonus leads to jump in Lloyds Bank customers

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Lloyds Bank has seen the biggest jump in new current account customers, new figures from the Current Account Switch Service (CASS) have revealed.

The data covers the last quarter of 2020, with Lloyds Bank gaining a net 29,556 bank account customers.

The jump coincides with the bank introducing a £100 welcome bonus for new account holders back in September.

This is almost double the increase in new customers seen by second place Starling Bank. Other banks to see a significant jump in account holders include NatWest (9,003), Clydesdale Bank (8,584) and Monzo Bank (6,765).

NatWest was another bank to introduce a switching incentive, paying new account holders £125.

At the other end of the scale, TSB and Santander saw the biggest net losses of customers. TSB’s balance dropped by 20,236, while Santander saw an 18,270 fall in current account holders. Other big names also saw sharp falls, including Halifax (11,231) and Barclays (6,398).

A big factor in TSB customers heading for the door was its decision to axe the interest paid on its Classic Plus account.

What is the Current Account Switch Service?

The CASS was introduced in 2013 as a way of making switching between banks a slicker and less stressful experience.

Banks and building societies have signed up to the service, which puts the new bank in charge of moving over your existing direct debits and payments, while your old bank closes your existing account once the switch has taken place.

Last month the CASS confirmed that there had been a substantial drop in the number of switches taking place across 2020, which it blamed on the pandemic, with bank customers less likely to be worried about who they bank with.

Its latest figures show that in the first quarter of 2021, a total of 137,976 switches took place. This is sharply down from the 189,273 switches which were carried out in the final quarter of 2020, but very similar to the number seen in the third quarter of last year when it noted there were similar social distancing measures in place for many across the UK.

Interestingly, while switch numbers were low in January and February, they jumped sharply in March, which CASS put down to the roadmap for recovery from the pandemic becoming clearer.

David Piper, head of service lines at Pay.UK ‒ which owns and operates the CASS ‒ said: “As we moved into 2021, many of the trends from a difficult and unusual 2020 followed as the pandemic developed and the financial ecosystem continued to adapt. Through a fast changing market The Current Account Switch Service remained focussed on its priority objectives, to ensure that the service is available to those who wish to move their current account in a simple, reliable and stress-free manner.”

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