League table: the banking institutions winning and losing buyers
Official data shows Britons are flocking to Halifax, but ditching Lloyds 
Barclays, HSBC, Lloyds and RBS all lost more customers than gained last year
Halifax is the new favourite for current account switches, attracting more customers than any other bank.
Figures released yesterday by the Payments Council – the body responsible for the switching service – revealed that the bank also came out on top in terms of net gains, winning more than 66,000 customers while losing 20,000 in the final three months of 2013.
Halifax, which offers £100 to those who switch, also gives Reward Current Account customers £5 a month in interest.
Santander and Nationwide also drew in a large number of new customers. They too offer attractive incentives, and some of the highest interest rates on the market.
Nationwide pays 5pc interest on balances up to £2,500 to those on its FlexDirect account , while Santander’s 123 account gives 3pc interest on balances between £3,000 and £20,000, as well as up to 3pc cashback on household bills.
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It was not such good news for Lloyds.
Britain’s biggest bank has lost far more customers than it has gained, with more than 103,000 customers ditching the bank at the end of last year.
Although it now offers a decent rate of 4pc interest on its Club current account , its problematic split from TSB last September – which led to persistent technical glitches – affected a number of its customers, prompting them to move their banking elsewhere.
The Co-operative Bank also faired badly in the switching service figures. It lost more than 17,000 customers at the end of last year, while only gaining around 2,000. This is somewhat unsuprising considering the scandal surrounding the mutual.
In November, the Co-op admitted that savers were ditching its current accounts in the wake of sex and drug revelations about its former chairman, the Reverend Paul Flowers.
The bank has tried to entice new customers with a £125 cash incentive (£25 of which goes to charity) but figures are yet to reveal whether this has made much difference.
The winners and the losers
Source: paymentscouncil.org.uk
Kevin Mountford, head of banking at MoneySuperMarket said: “For the first time, we are able to see the winners and the losers of the current account switching service up to the end of 2013.
“Customers are ditching big name banks for challengers with hot offers, or just cleaner reputations.”
While Santander, Halifax and Nationwide had attracted customers with innovative and competitive products, Mr Mountford said, Co-op bank, Barclays and the RBS group, were losing customers after being hit with mis-selling investigations and IT crashes over the past couple of years.
The Payments Council said there were 592,695 switches in the first half of 2014. With approximately 49m current accounts in the UK, this means only 1.2pc of people with current accounts switched bank in the six months to June.
The 10 best current accounts
First Direct’s 1st Current Account
Pays £100 to those who switch. The account charges £10 a month unless customers pay in a minimum of £1,000 each month or maintain an average monthly balance of £1,000. 1st Account customers can also open a First Direct regular saver account, which pays 6pc.
Best for… those who value customer service, and don’t mind internet and phone only banking.
Santander’s 123 Current Account
The Santander 123 current account offers cashback on household bills, paying between 1pc and 3pc on water and council tax, energy bills, Santander mortgage repayments, and broadband packages. This account also pays in-credit interest of 3pc for those with £3,000 to £20,000 in their account.
There is a £2 monthly fee on the account.
Best for…families, thanks to the cashback, and those with large deposits of up to £20,000. Plus anyone who wants to take out the 123 Credit Card, as the £24 annual fee is waived for the first year if a 123 current account is also held.
Lloyds Club Current Account
Club Lloyds customers earn up to 4pc interest on balances of up to £5,000. Two direct debits must be set up on the account. A £5 monthly fee is waived if the account is funded with £1,500 a month.
Customers can also choose one of three perks – annual Gourmet Society membership, six Vue cinema tickets, or subscription to one of a selection of magazines
Best for…those who have a high monthly income and want to take advantage of the high interest and perks.
Nationwide FlexDirect Current Account
The building society’s FlexDirect account pays an attractive 5pc interest for 12 months on balances of up to £2,500. The rate then falls to 1pc.
The account also offers a fee-free arranged overdraft for 12 months.
Best for…people who want good service and decent interest rates. Nationwide is an allrounder for those whose account is usually in credit.
Nationwide FlexPlus Current Account
For £10 a month, FlexuPlus account customers get breakdown cover, mobile phone insurance, travel insurance and free cash withdrawals abroad. The account also pays 3pc interest on balances of up to £2,500.
Best for…those who would otherwise be paying out for travel and phone insurance, and breakdown cover.
Tesco Current Account
Tesco Bank customers will be offered points via Tesco’s loyalty Clubcard scheme, as well as interest of 3pc on balances up to £3,000. However, the bank will charge £5 a month unless customers pay in £750 a month.
Best for… Tesco customers, and those who have a relatively low income and can still receive 3pc interest.
Halifax Reward Current Account
There is a £100 bonus for switching your account to Halifax, and monthly reward payments of £5, which are ongoing. To earn the £5 monthly reward you must deposit £750 each month and remain in credit.
The Halifax Reward Current Account has high overdraft fees, charging £1 per day on overdrafts up to £1,999.99 and up to £3 a day for £3,000 and over.
Best for…those with a smaller income, who can receive £5 a month for £750 deposits.
Marks & Spencer Current Account
M&S Bank’s current account comes with a £500 overdraft, with the first £100 interest-free. Unlike other M&S current accounts, this one has no monthly fee, and those switching to M&S will receive a £100 M&S gift card. Account holders earn one point for every £1 spent on their M&S Visa debit card in M&S (in store and online) and customers also get preferential rates on some M&S Bank products.
Best for…regular M&S customers.
Norwich & Peterborough Gold Classic Current Account
The account requires customers to pay in at least £500 a month otherwise a £5 monthly account fee will be charged. There is a £250 interest-free overdraft for six months.
Best for… overseas spending. The Bank offers free debit card usage abroad with no withdrawal charges, transaction charges or handling fees.
Clydesdale & Yorkshire Banks Current Account
The banks give 2pc interest on balances up to £3,000, however, a minimum monthly credit of £1000 is required.
Best for…those currently languishing in a low-interest current account.
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