Bank account switching could be a great way to make some extra cash. And we could all do with a bit more cash right now!

So today I’m featuring an easy method for generating handy lump sums by taking advantage of the incentives being offered by some UK banks.

The banks are currently battling one another for your custom. And they are offering some enticing cash bonuses (sometimes other freebies/benefits as well) to get you to sign up. 

I have seen offers of up to £250, which is certainly not to be sneezed at. What’s more, you can repeat the process multiple times, potentially making thousands of pounds.

What bank account switching involves

Making money this way simply involves switching your current bank account to a different provider that is offering an incentive for doing so. 

An example at the time of writing is First Direct, which is offering £175 in free cash (and a range of other benefits including a £250 0% overdraft).

Other banks that have offered bank account switching bonuses recently (and may still be) include TSB, HSBC, Halifax, Lloyds, Nationwide, NatWest, Santander, RBS, Co-op Bank, and Virgin Money.

You might think bank account switching is a stressful hassle. But the good news is that most switches nowadays can be managed by the Current Account Switching Service (CASS), which makes the process quick and easy. It generally takes no longer than seven days.

CASS automatically ensures all direct debits and standing orders are switched to your new account. It also ensures that any incoming payments are automatically re-routed to it.

• Though note that continuous payment authorities, sometimes used for subscriptions and loan repayments, are NOT covered by CASS. These recurring payments are set up by providing your credit/debit card details. If you have any of these you will need to switch them manually yourself.

Once your application has gone through and your new account been opened, your bank account switching bonus will be credited to it. This can take as little as 10 days, though depending on eligibility requirements (see below) it may take longer.

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Eligibility requirements

The above are the bare bones of this method, but there are also certain requirements you’ll need to meet to qualify for switching bonuses. 

Requirements vary between banks. But typically they will want you to deposit a certain amount of cash into your new account, either as a single sum or over a period such as three months. Many banks also require you to have at least two active direct debits on the account in question.

Another common requirement is that you haven’t held an account with the bank you’re switching to previously, at least within a certain period. So with First Direct (mentioned above) you can’t ever have had ANY account with them (e.g. a current account, credit card or mortgage). Also, you can’t have opened a current account with their sister bank HSBC since January 2018. 

• If for whatever reason you don’t want to change your current account, you can still benefit from this method by first setting up a ‘burner’ account with a bank that doesn’t typically offer switching bonuses. You can then use this to switch to a bonus-paying account, as long as you can meet their eligibility requirements.

Finding bank account switching offers

Bank account switching offers come and go quite frequently. The best way to keep track of them is through specialist financial websites which are regularly updated. 

I recommend this page on the popular Money Saving Expert website which lists all the best current bank switching offers. It reveals the bonuses and other freebies that are on offer and eligibility requirements, e.g. how long it must be since you last had an account with them.

Rinse and repeat!

Of course, each switch only generates one bonus. Having done it once, however, there is no reason you can’t do it again, and again…

Just be aware that applying for a new bank account will inevitably show up on your credit record and if you do it multiple times could affect your credit score.

So it may be advisable to delay if you are currently doing something that requires a good credit score, e.g. applying for a mortgage. 

In any event, it’s probably best to apply this strategy over a longer period, rather than try to cram in every offer over just a few months.

Annie’s story

My sister Annie is a serial switcher and has made hundreds of pounds from switching over the last few years. She was kind enough to send me her story (and advice), which I have reproduced (slightly edited) below…

I’ve changed bank accounts three times in the last five years, having stayed with the same bank for the previous thirty! 

Initially I was lured by the prospect of a hefty £250 to move to Virgin Money. Then I switched again to get bonuses of £150, first with Nationwide, then more recently with NatWest. 

The process is straightforward, but you have to follow the instructions to the letter. Most importantly, I found it’s nearly always the case that you can’t have been a previous customer of the bank offering the bonus, or at least not in the last five years. Secondly, you always have to use the dedicated ‘Switch’ service. And thirdly, you generally have to pay in a minimum amount each month, including a couple of direct debits. 

Like most people, I worried that all my standing orders and direct debits would get lost or messed up in the move, but the system really does operate flawlessly. It’s a very easy way to make some money! Just read the small print. Also you will probably have to download the app for your new bank in order to qualify, but I’ve found that very useful anyway. I’m currently eyeing up another move to First Direct. My only problem going forward is that I am in danger of running out of banks to switch to!

Many thanks to Annie for sharing her story.

Closing thoughts

Switching bank accounts clearly isn’t going to make anyone rich. But in these times of financial strain, the extra money from bonuses can come in very useful indeed.

And with CASS making the whole process simple and straightforward, there really is no reason you can’t make hundreds or even thousands of pounds by this method in the months and years ahead.

As always, if you have any comments about this article, please do leave them below.

Nick Daws writes for Pounds and Sense, a UK personal finance blog aimed especially (though not exclusively) at over-fifties.

Photo by Avery Evans on Unsplash

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Q. Will savings rates get better? Or should I lock my cash away now in a fixed rate account?

A. Calling the top of the savings market isn’t straightforward, but it’s looking highly likely that for we’re there.

The Bank of England held rates last week so fixed savings rates may well have peaked. When banks are setting fixed rates, they’re not only interested in what happens a month or two down the line, they look at what’s likely to happen to interest rates during the entire fixed period.

Back in June, when inflation was surprising on the upside, they started to think that rates would have to rise further than they’d predicted and might stay there for longer than expected too.

As a result, savings rates climbed. More recently, as inflation has fallen, they’re pricing in fewer rises, so savings rates have eased off very slightly.

The very best fixed rates over two and three years are down a little from their July levels, and over longer periods they haven’t moved for a while. It looks like they’re settling around the 6% level for now. Even the one-year fixed-rate market may have reached the top.

It means that anyone who is holding off for a good time to fix their rates should get their skates on – especially if their cash is earning very little elsewhere in the interim.

Sarah Coles has been an analyst with Hargreaves Lansdown for the past five years, after spending 14 years as a financial journalist writing for publications ranging from Bloomberg to AOL Money. 

Her areas of expertise include savings and financial planning – covering everything from tax to borrowing, spending and the housing market. She is also co-presenter of HL's ‘Switch Your Money On' podcast.

She is passionate about encouraging people to get to grips with every aspect of their finances, not because finance is inherently fascinating to everyone, but so they have enough money for the things that really matter to them in life.

Photo Credits: Pexels

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It’s important to know how much debt, if any, your partner has before you enter into marriage.

While you are not responsible for the debt they may have acquired before marriage, their financial situation and position will still have an impact on you.

In the UK, the general rule is that each spouse is responsible for their debts, regardless of whether they are married or in a civil partnership.

Joint liability arises if one spouse takes out a loan and the other co-signs on the loan agreement.

Once this happens, both spouses may be responsible for repaying the debt so it’s important to carefully consider that if the worst arises, would you be ok with paying off this debt.

If a married couple opens a shared bank account and uses it to pay for joint expenses, in that instance, both spouses may be responsible for any debt associated with that account.

It’s essential to remember that these are general rules, and the specific circumstances of each case can impact the responsibility for the debt. Therefore, it’s always a good idea to consult a financial or legal professional for personalised advice to clear the rules in your situation.

Impact of separation on debt liability

If you’ve separated from your spouse but still have joint financial obligations, there are things you can do to change your responsibility for the debt. For example, you could negotiate a separation agreement.

In this agreement, both parties will agree on dividing the joint debt and duties in a separation agreement. Although this agreement isn’t legally binding, if written up properly and you have both had legal advice, it will be difficult for one party to argue in court that they can’t stick to the terms.

Till death do us part

Death is something that people do not like to speak about, yet it is the one guarantee we all have in life. Therefore, understanding what will happen to a spouse’s debt when they pass away is essential.

How will the spouses’ debts and assets be handled in the event of death? If a spouse dies and leaves behind debts, their estate, i.e. the money and property they have left behind, is responsible for paying off those debts.

However, the spouse is still responsible for paying the balance of joint loan agreements or in the instance where a loan guarantee has been provided.

Protection from spouse’s debt

If being held responsible for a spouse’s debt is a considerable concern, the good news is that you can take action to protect yourself.

Firstly, avoid co-signing loans. Taking this stance will help ensure you are not held responsible for their debts.

Another thing that will help is keeping your finances separate. Having a different bank account will help avoid confusion or overlap in your financial obligations. Furthermore, as well as not opening joint accounts, steer clear of joint credit accounts as you’ll be liable for any debt jointly incurred here.

Finally, it’s essential to keep up-to-date with your credit score. Check your credit report regularly to ensure that any debt your spouse has taken on does not appear on your statement.

Photo by Sandy Millar on Unsplash

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