Money Saving Expert Martin Lewis has issued a warning to Lloyds customers earning less than £28,500 a year if they switch to the bank to get its £200 bonus.
Right now five major high street banks are offering cash incentives to get customers to switch their current account.
Speaking on the Christmas special of The Martin Lewis Money Show on ITV1 and ITVX, Martin heard from one woman who had been with the same bank for 42 years, and he advised those watching at home that this is surprisingly common.
As a result of that customer stickiness, many banks offer cash to get customers to move to another brand.
Currently, banks including Santander, First Direct, Club Lloyds, NatWest and Nationwide are all offering cash payments of between £150 and £200 a year.
Lloyds’ offering is the most lucrative, with £200 cash paid into your account after you make the switch from your current bank, with everyone eligible except existing Lloyds, Halifax or Bank of Scotland customers.
But Martin warned that you need to have a high monthly income in order to make the Lloyds switch worthwhile, because you will be charged a monthly £3 fee unless you pay the equivalent of a £28,500 salary into it.
Martin said: “It is a good idea to do and it is so easy.
“To switch, you need to use the bank’s 7-day easy switching service which will close your old account for you, it will auto forward any payments to that account, it will move across any direct debits, and standing orders.
“The highest up front cash if you want the cash straight away is from Club Lloyds, it also gives you a year’s Disney Plus.
“Many banks want you to do a minimum monthly payment…which is their way of effectively saying they want salary going in.
“So you convert it into salary. So with Natwest it’s £1,250 a month which is equivalent to a £16,000 salary before tax, Lloyds is the one to watch.
“It’s [a minimum of] £2,000 a month, which is equivalent to a nearly 30 grand a year salary, which not surprisingly will leave a few people out.
“If you’ve got less it charges you a monthly fee.”
