Product axed

Tesco Bank pulls out of current accounts sector

Tesco Bank

The bank is reorganising its product range (pic: Terry Murden)

Tesco Bank has announced a further rolling back of its range of services with the closure of its personal current account.

It had been closed to new business in December 2019 and will now also close for existing customers at the end of November.

Pulling out of current accounts represents another reversal of the expansion of the bank under former CEO Benny Higgins who launched them in 2014 as the bank edged towards becoming a full service bank.

Within months he was saying that current accounts could grow to be as big as Tesco’s credit card business which at the time were being used in one in eight credit card transactions in Britain.

There are currently c.213,000 current accounts open but it is estimated that only 12% are being used by customers as their primary current account. 

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Most accounts have limited activity or are being used for other purposes, such as a savings pot. 

Mr Higgins also led the bank into mortgages, but the portfolio was sold in 2019 to Lloyds Banking Group in a £3.8 billion deal.

Tesco Bank will now write to current account customers to inform them of the closure of their account and to explain the options available.  Customers will receive their letter in the next two weeks.

These options include:

  • Moving to a new current account provider via the current account switching service (CASS)
  • Moving their balance to a Tesco Bank savings account
  • Registering for Tesco Clubcard Pay (a new product from Tesco Bank currently in test with a panel of Tesco shoppers and colleagues)
  • Applying for one of Tesco Bank’s range of credit cards.
  • Customers can find more details on which product might be right for them at tescobank.com/current-accounts/

Tesco Bank will provide customers with any support needed during the process of closing or switching their account by the 30 November deadline.

Customers can use the Current Account Switch Service at www.currentaccountswitch.co.uk to switch their banking to another current account provider. This is a guaranteed free service and the switch can be done within seven days. 

Customers who choose not to switch to a new current account have been asked to move any regular incoming or outgoing payments to a different account, and to make sure their account has a zero balance by Tuesday 30 November 2021.

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