Halifax to chop current account switching bonus by 25% from March

Picture of the Halifax on Gentlemans Walk in Norwich. Picture:
Archant library

Picture of the Halifax on Gentlemans Walk in Norwich. Picture: Archant library - Credit: Archant � 2008

Halifax is shrinking its £100 switching bonus offer to current account customers by 25% in a further blow to consumers.

From March 1 the bonus will drop to £75, but the bank believes its switching package will still be competitive 'within the current economic climate'.

It is the latest current account provider to reduce its perks since the Bank of England base rate was cut to 0.25% last year, pulling the rug from under savers who looked to current accounts for more generous returns while traditional savings accounts rates remain low.

Halifax previously announced the £5 per month it paid to its Reward current account customers who fulfil certain criteria would fall to £3 from February. Santander has also recently halved the 3% rate on its flagship 123 current.

Rachel Springall, a finance expert at Moneyfacts, said: 'We could well see more banks cut down their cash perks because of this bold move, although on the other hand, this might be the perfect excuse for other brands to use this news to their advantage to try and entice more customers in their campaign.'

The most recent figures from the current account switch service (CASS), which was launched in 2013 to make it easier for people to ditch and switch banks, show Halifax, Santander and Nationwide Building Society were among the providers to see net gains in customers switching between April 1 and June 30, 2016.

Halifax said it will continue to pay the bonus – which is open to customers using the switching service – directly into customers' accounts by the time the switch has completed.

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Russell Galley, managing director at Halifax, said: 'We believe it is not only our competitive switching offer but also the high levels of service we deliver which encourages customers to make the move to Halifax.

'Since the introduction of CASS, we have been a market leader with more than 700,000 customers making the switch to Halifax.

'We're telling people about the change now in order to give them a chance to make the switch before March 1.'