Banking News

Article written by Kellands Hale, our preferred independent advice firm.

This article is not intended to be financial advice to any individual. The views expressed are those of the author and Moneyfacts.co.uk does not endorse the content.

If you are a business owner in today’s world, it is likely you are searching for ways to reduce costs. Since early 2020, businesses have weathered many storms – the COVID-19 lockdowns and supply chain issues being just two.

According to the Office for National Statistics (ONS), business closures increased by 50% between July 2020 and July 2021. If your business is still thriving in today’s climate, it’s a testament to your innovation and skill as a business owner. Nevertheless, you could still be concerned about how the current cost of living crisis might affect your company going forward.

Fortunately, there is one under-used yet effective way for both businesses and employees to save money, and that is through “salary exchange”.

The move comes after HSBC launched its £170 switch offer last week.

Lloyds Bank will incentivise any customers switching from another bank to its Club Lloyds or Club Lloyds Platinum Account with a £125 cash bonus. The offer is available with immediate effect and is only available through the Current Account Switch Service (CASS) until 27 June.

“On top of £125 for switching to us from 17 May, new Club Lloyds customers will also be able to pick from a range of lifestyle benefits, earn cashback while they shop and gain access to exclusive offers on savings and mortgages,” said Martin Turner, Head of Personal Current Accounts at Lloyds Bank.

The switching offer comes after HSBC announced a similar £170 cashback offer for those looking to switch to its Advance or Premier current accounts last week.

In addition, Nationwide and first direct also hold current account switching offers for those looking to take advantage of the CASS.

Nationwide will offer £100 for new customers to switch to their Flex Account, while those who have a current account, mortgage, savings account, or business savings with the high-street bank can enjoy a £125 offer for making the switch.

Lloyds Bank do extend this offer to existing customers who meet a certain set of criteria. These customers need to move their current account from another bank using the CASS system and if they haven’t had a switching bonus from Lloyds Bank before.

This means existing members cannot access the offer by upgrading their Lloyds account internally. In addition, customers with other products from the bank, such as a mortgage or savings account, with a current account from a different provider will also be eligible for the switching offer.

Alternatively, first direct will provide those making a switch to their 1^st Account with £150 cashback.

“There are now several brands out there offering upfront switching incentives to entice banking customers to move their existing current account,” said Rachel Springall, Finance Expert at Moneyfacts.

“As these offers can come and go throughout the year, consumers should not expect them to be around forever. Just last week, Halifax withdrew its free cash offer of £125,” she said.

However, Springall warned consumers to consider their options and spending habits before committing to a current account of their choice.

Consumers cut back on spending as cost of living begins to bite.

Britain’s economy contracted by 0.1% in March, according to data released by the Office for National Statistics (ONS) today.

“The March decline highlights the pressure the economy is now coming under from the cost of living squeeze and the danger of it falling into outright recession later this year,” said Rupert Thompson, Investment Strategist at Kingswood.

The services sector, which includes contributions from education, arts and entertainment, and food service among others, fell 0.2% last month and was the main contributor to this decline.

More particularly, retail and wholesale activity fell 2.3% in March, with new car sales struggling to grow due to global supply issues.

“Household expenditure was still positive in the first quarter, as consumers took advantage of new-found freedoms to go out and spend money in shops, restaurants and hotels. But that was really the calm before the storm, as higher energy prices and taxes kicked in from April,” said Laith Khalaf, head of investment analysis at AJ Bell.

Nearly a fifth of these savers have used over £1,000 of their savings over the past 12 months.

Four in ten savers have been forced to use their savings account to help cope with the rising cost of living over the past 12 months.

This is according to Yorkshire Building Society and the Centre for Economics and Business Research’s Inflation Nation report, which was released today.

“Families across the UK are already having to budget carefully in order to make ends meet. Some have accrued savings over the course of the pandemic, which can help foot monthly bills. Others simply do not have the financial resilience to withstand rising costs,” said Stephen White, Interim Chief Executive of Yorkshire Building Society. 

The report also found that of these savers, 23% used between £200 and £499 of their funds, 17% used more than £1,000 and 12% had used between £500 and £999.