Nationwide's £200 switching bonus saw a record 163,000 customers sign up – with other banks losing out

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

Britain’s biggest building society hoovered up 163,363 bank account switchers in the final three months of 2023, according to the Current Account Switch Service (CASS).

This beats the previous biggest quarterly net gain of 111,941, also by Nationwide, in the last three months of 2022.

At the end of 2023, Nationwide was paying a £200 switching bonus to new joiners. The cash bribe was clearly a major draw for many customers.

Switching rush: Nationwide pulled in over 163,000 more customers than it lost in the last three months of 2023, fuelled by its attractive £200 switching bonus encouraging customers to join

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

Nationwide’s switching deal was then pulled on 21 December 2023.

The bumper £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 were paying switching bonuses, but none paid more than £175. 

Andrew Hagger, founder of finance website MoneyComms, said: ‘The UK’s biggest mutual gained 196,260 customers on the back of a £200 switching incentive which ran for four months from 21 September 2023.

‘Throwing attractive cash incentives at prospective new current 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 switches in the final three months of last year.

Barclays gained 12,823 more than it lost, while Lloyds Bank brought in just 5,800 more customers.

Meanwhile other banks haemorrhaged customers, with many jumping ship to Nationwide.

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

Hagger said that ‘consumers are happy to jump ship for the next freebie – particularly as people are still feeling the squeeze from higher bills’.

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

March was the busiest of these, with 132,282 customers switching current account.

Why are there so few switching bonuses now?

There are currently no switching bonuses to be found on the market.

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

This week First Direct pulled its £175 free cash offer, which launched on 26 March. On 5 April, NatWest and RBS pulled its £200 free cash offer and Santander cancelled its £185 offer, which launched on 18 March. HSBC removed its £100 offer on 10 April, which launched on 12 March.

Towards the end of March, Lloyds Bank pulled its £175 free cash switching offer which had been available since the middle of February 2024.

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

Rachel Springall, finance expert at Moneyfacts, said: ‘Consumers will find that the free switching cash perks offered by providers have vanished. These perks 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 using the CASS.’

As for when switching bonuses will return, Springall said: ‘The current account market will no doubt see a return of free cash offers, but these typically return when banks and building societies want to draw in new customers, or indeed when they expect consumers to be actively looking to move their deal, such as at the start of a new year.’