The times of three% cashback on payments are over
Almost three years in the past, Santander changed it’s fashionable 123 and 123 Lite present accounts with the Edge and Edge Up – however current prospects might hold these accounts open, and hold incomes. However that’s altering this summer season when you have the Lite model.
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What had been the 123 accounts?
These two present accounts from Santander provided as much as 3% cashback on family payments.
- 1% on Council Tax, cellphone, cellular, TV and broadband payments and Santander mortgage repayments
- 2% on gasoline and electrical energy
- 3% on water payments
Although you needed to pay a charge every month, it is best to have earned sufficient to clear that and make a revenue.
Our choice at Be Intelligent With Your Money was for the cheaper 123 Lite at £2 a month. The costlier 123 account, at £4 a month, provided curiosity on financial savings, however that charge might simply be overwhelmed elsewhere.
These had been closed to new candidates in September 2022, however anybody who nonetheless had an account has been capable of proceed utilizing it and incomes the cashback – till now.
What’s taking place to current accounts?
Prospects, together with myself and members of our Facebook community, have obtained letters of their on-line banking apps saying their current 123 Lite account might be transformed right into a Santander On a regular basis present account on 21 August 2025. The identical info can be displaying on the Santander website.
On this date you’ll cease paying the month-to-month charge related to the 123 Lite account, however you’ll additionally cease incomes cashback in your eligible payments.
Nonetheless, it doesn’t appear to have an effect on these with the complete 123 account. We’ve approached Santander to seek out out if there are plans to shut these accounts too.
What do you have to do?
You probably have the 123 Lite account, you don’t must do something – it’ll occur mechanically. Bear in mind the account isn’t being closed, it’s simply being transferred into an On a regular basis account. This implies there’s no impression in your credit score rating, your account quantity won’t change, and there’s no want to fret about current funds out and in stopping.
Nonetheless protecting the On a regular basis account gained’t profit you in any respect. It’s only a bathroom normal present account with no perks. So it may be sensible to alter it
Sadly no different banks supply cashback on payments, although you can swap to the Santander Edge or Edge Up – extra on these in a second. If you happen to resolve to do that your account quantity will keep the identical.
Zopa is presently trialling a brand new present account that does supply 2% cashback on direct debits, however it’s capped at £1,500 whole spend (so roughly £125 monthly on common). As soon as this account is totally launched and options confirmed we’ll write a full overview.
If you happen to don’t need to stick to Santander you’ll be able to simply transfer your direct debits to a different account utilizing bank switching. A full change will shut the Santander account, however you’ll have the ability to benefit from bank switch offers with free money and get safety if one thing goes fallacious.
Alternatively you’ll be able to carry out a partial change the place you select what strikes over. It will hold your Santander On a regular basis account open, although not all banks enable you partial switches in.
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123 Lite vs Edge v Edge Lite
You may select to improve your account to one of many Edge accounts. These are comparable however not pretty much as good. For a begin they value extra. The Edge is £3 a month and the Edge up is £5 a month.
You additionally get much less cashback. It’s simply 1% on every qualifying invoice, and there’s a cap on every class too – although you’ll want huge payments to go previous these with this charge. The cap is £10 for the Edge and £15 for the Edge Up.
Personally I might solely take a look at the Edge and never the Edge Up. The additional £2 a month doesn’t get you something particular in return.
For me, transferring from the 123 Lite to the Edge would see my annual revenue after payments fall from round £80 to round £30 – a £50 drop per yr. Nonetheless, that’s £30 I wouldn’t have if I resolve to pay my payments from a non-cashback account.
Plus there’s the additional advantage of the 6% paying Edge Saver account you get with the Edge present account (not the Edge Up). That is just for 12 months and solely on as much as £4,000 – however you’ll be able to shut it after a yr and open one other one very simply.
If you happen to nonetheless have the complete 123 account, you’ll be able to seemingly hold this open as regular for now. You’ll pay £1 extra for this every month than the Edge account, so that you’ll need to calculate whether or not the elevated cashback in your payments will cowl this.
If you wish to know extra, I’ve written a fuller comparison of the Edge, Edge Up, 123 and 123 Lite
