Martin Lewis has issued advice on managing your bank account and potentially boosting your income. The consumer expert provided general guidance applicable to customers of major banks, including Barclays, Lloyds, Halifax and Santander.
Switching incentives explained
The advice came after a question on his BBC podcast regarding switching bank accounts. A listener contacted the programme explaining she currently banks with Lloyds but was interested in current account switching incentives from rival banks. A host of banks are providing one-off payments to encourage customers to switch. This includes Nationwide Building Society offering £175, Barclays providing £200 payments, Santander offering £180 and NatWest paying £200.
HSBC is also providing payments of £500, while First Direct is offering a £200 bonus. However, the questioner stated she was reluctant to leave Lloyds as she gets additional benefits with her account, including cinema ticket vouchers.
Club Lloyds perks
Club Lloyds customers can select from a range of Lifestyle Benefits. Additional perks available to customers include a Disney+ subscription, coffee and dining offers and vouchers for cinemas such as ODEON and Vue.
Textbook way to earn cash
Her query was whether she could open a secondary account simply by transferring a couple of direct debits and fulfilling the other requirements, thereby claiming a switching bonus, while maintaining her Lloyds account as her primary account. Mr Lewis had some encouraging news for the prospective switcher.
He told the listener: "Everything you say is absolutely possible and is the textbook way for savvy money savers to do this." Nevertheless, he cautioned that it requires "a little bit of planning" to capitalise on a series of these switching deals.
Mule account strategy
Mr Lewis outlined the strategy of having a "mule account" or a "burner account" that you transfer between banks to take advantage of these switching incentives, potentially earning you many hundreds of pounds.
Make thousands of pounds
Mr Lewis said: "You've got to check the terms and conditions each time, but there are lots of people who do this and who make thousands of pounds." He also revealed that many members of his team at Money Saving Expert have "made decent money" by taking advantage of these offers.
His recommendation was to begin by setting up a no-frills basic current account, making it straightforward to transfer when you spot a switching offer. These deals typically require you to move across two direct debits, so you'll need to have these already in place in your burner account prior to switching.
Additionally, you may be required to deposit a specified sum as part of your switch in order to qualify for the bonus.
