As well as this, the bank has also launched a new offering which gives customers £160 if they switch savings accounts. This comes during the cost of living crisis hurting households across the UK which is being exacerbated by the rise in energy bills. Customers will get double cashback on their gas and electricity bills, as well as on Santander Home and Santander life Insurance policies.
According to Santander, this will be paid by Direct Debit from September for two months and will affect those who are 1|2|3, 1|2|3 Lite, Select and Private current account customers.
The financial incision confirmed the cashback rate will double from two percent to four percent. As well as this, the monthly cap is set to increase from £5 to £10 per month.
After this deal, the cashback for energy bills will return to two percent and will be capped at £5 per month.
Any of the bank’s eligible customers will get this additional cashback automatically and cashback on other household bills categories will continue to be paid.
Furthermore, the bank is offering £160 cashback to both new and existing customers if they choose to switch their current savings account to a 1I2I3, 1I2I3 Lite, Everyday, Select or Private current account.
To be eligible for this, customers need to use the Current Account Switch Service and, set up and maintain two active direct debits within 60 days.
On top of this, customers will need to deposit at least £1,000 and log in to online or mobile banking.
Cashback will be paid straight into their qualifying Santander current account within 30 days.
This comes as energy bills are forecast to reach as high as £3,600 this coming October and households are in the midst of a £693 at the moment.
Hetal Parmar, the head of Banking and Savings at Santander UK, shared why the bank has decided to launch this new cashback offering.
Ms Parmar explained: “For over a decade, our 1|2|3 current account customers have received ongoing value every single month.
“Today’s package of offers is an added boost, putting more money into our customers’ pockets and highlighting our commitment to supporting them with their day-to-day bills.”
Michelle Stevens, banking expert at finder.com, outlined her concerns for how peoples’ savings accounts will be impacted by inflation.
Ms Stevens said: “The fact that savings accounts are currently losing people a lot of money in real terms is yet another worrying outcome from the cost of living crisis.
“They are still a prudent choice for many consumers given the security they offer and the fact that they do still earn you interest.
“However, it may not be a sustainable option for many if inflation doesn’t start to come down soon.”