When it comes banks, it seems that UK customers are far too loyal for their own good. Of the 70 million active personal bank accounts just over 1 million customers switched their account in 2016, and the figures look similar for 2017.
Despite representing less than 2 per cent of the market, most banks are fighting hand over fist to entice these switchers to join them. All except perhaps Barclays.
In a somewhat peculiar marketing strategy, Barclays doesn't offer a switching bonus, high interest rate on current or savings accounts, cash back on bills, or any of the typical sweeteners we've come to expect. That perhaps goes someway to explaining why it is haemorrhaging customers to the competition. In fact in the latest quarterly report the bank lost over 16,000 from July 2017 to September 2017. That's more than any other UK bank.
Instead of headline grabbing sweeteners and incentives, Barclays customers can, if they choose, sign up to the Blue Rewards scheme.
What is Barclays Blue Rewards?
Essentially, it's a scheme you pay £3 per month join, and are then ‘rewarded' with £7 per month which you can withdraw to your current account.
There are additional rewards depending on the range Barclays of services you hold.
- Up to £3 a month for buildings or contents insurance
- £5 a month for mortgages
- £1 a month if you have a loan with Barclays
- £1 a month if you open and spend on a Platinum Barclaycard
On the face of it then, someone with the full spectrum of Barclays products could earn up to £17 per month, but who would do that? Most people will shop around for the cheapest mortgage, home insurance, or loan, all of which would like net a much larger saving then could be earned via Blue Rewards.
For most of us though then the scheme will earn a net £48 (£84 in rewards minus the £36 paid into the scheme).
Not bad, how do I join?
Joining isn't as a straight forward as it might first appear. First you need an active Barclays current account. Basic accounts don't count. Then you need to opt-in to the scheme via online banking.
To start earning, you need to pay in at least £800 per month, and have two direct debits leaving the account. If these criteria aren't met, the £3 monthly fee is refunded back to your current account.
The rewards you are paid are help in a digital wallet, which almost sounds a bit like Bitcoin, alas it's nothing that technically evolved. The digital wallet is accessible via online or mobile banking, and rewards can be transferred from it to your current account.
Is it worth it?
Now that's the 64 million dollar question right? Or should that be the £52 question, as that is how much you'll miss out on when joining or staying with Barclays over switching to First Direct (£100 switching bonus). Higher income earners could stand to earn £150 by switching to HSBC's Advance account, and Halifax offers switchers £75 plus £3 per month if certain conditions are met.
Other banks offer interest incentives such as Nationwide's FlexDirect (5 per cent on up to £2,500) or Tesco Bank which is offering 3 per cent interest on up to £3,000
Of course it's not all about the money, accessibility, services, online banking, mobile apps, might all play a part in the decision to switch, and Barclays ranks reasonably well across all of these. Yes, the Blue Rewards scheme could be a little simpler, but if you are happy with Barclays, then £48 per year is better than nothing, but it certainly won't serve as an incentive to switch to the bank.