Nationwide's 'Fairer Share' £100 payment for eligible members

Albermarle

Section62 said:

Albermarle said:

Just a small correction. Nationwide Loyalty easy access account is currently paying 3.2%, so more than YBS. However I think you have to be a member for at least 15? years.

Unfortunately that account is NLA.  I think it was withdrawn about 2 years ago, possibly a bit longer.

Before going NLA the differential between the rates for different lengths of membership were progressively reduced before, IIRC, being replaced by a single band (for anyone with 1 year's membership or more?) which qualified for the single rate now left.

Previously the top rate was only available to members with something like 15 years of membership.

It might be NLA to new customers, but is still there for existing customers. ( for now) 

jimjames

MX5huggy said:

I don’t frequent the mortgage board so for balance with the savers I’ll gripe here that it appears that having a £150k mortgage with them but no current account also make me a second class member. 

Fortunately having a £111 mortgage with them does qualify but probably won't next year

huw01

Section62 said:

huw01 said:

Also over time, this current account switching bonus that banks are offering will come to an end. It is becoming evident that people are only opening them to switch, bag the money and move on (I am guilty of this as much as anyone). The figures that are released for how many banks are gaining and losing customers generally correlate with if they were offering an inventive at that time.

I don't agree.  It is clear that switching incentives work - your own post confirms this - so why would the banks stop doing it?

The banks know that some people would switch and move on again soon after.  They are likely to have done calculations on how many are likely to do this before launching the offer.  The solution isn't to stop offering switch bonuses, instead all the banks need to do is to tinker with the T&C's regarding the amount of time you have to remain a customer and/or only allow you to benefit from an offer with them once. (e.g. First Direct).

That the banks have these levers and don't use them to the fullest extent would suggest they have calculated that a certain level of repeat switching is still beneficial to them.

It also depends what the bank's objectives and strategy are.  If the senior management teams performance related pay is based on "Number of new current accounts opened" then they are hardly going to complain if lots of customers want to help them out by switching multiple times.

huw01 said:

If Nationwide stop offering the switching deal and in-place offer a payment for their customers year on year, it will probably in the long run expand their customer base.

There's no indication they are planning to do this (yet).  I doubt their strategy involves not having a new switching incentive offer in the near future.

The switching incentives only work for the period they are available. So in one quarter some banks are up as they have been offering incentives, in the quarters where they don't have an offer on, they lose them as people switch away to banks that offer a new switching incentive. If they do work in the long term then surely there must be some banks that are loosing customers hand over fist - and others must have over time expanded their customer base significantly. I doubt this is the case though, The switching incentive, like the 0% fee free balance transfers will disappear over time.

Section62

huw01 said:

Section62 said:

huw01 said:

Also over time, this current account switching bonus that banks are offering will come to an end. It is becoming evident that people are only opening them to switch, bag the money and move on (I am guilty of this as much as anyone). The figures that are released for how many banks are gaining and losing customers generally correlate with if they were offering an inventive at that time.

I don't agree.  It is clear that switching incentives work - your own post confirms this - so why would the banks stop doing it?

The banks know that some people would switch and move on again soon after.  They are likely to have done calculations on how many are likely to do this before launching the offer.  The solution isn't to stop offering switch bonuses, instead all the banks need to do is to tinker with the T&C's regarding the amount of time you have to remain a customer and/or only allow you to benefit from an offer with them once. (e.g. First Direct).

That the banks have these levers and don't use them to the fullest extent would suggest they have calculated that a certain level of repeat switching is still beneficial to them.

It also depends what the bank's objectives and strategy are.  If the senior management teams performance related pay is based on "Number of new current accounts opened" then they are hardly going to complain if lots of customers want to help them out by switching multiple times.

huw01 said:

If Nationwide stop offering the switching deal and in-place offer a payment for their customers year on year, it will probably in the long run expand their customer base.

There's no indication they are planning to do this (yet).  I doubt their strategy involves not having a new switching incentive offer in the near future.

The switching incentives only work for the period they are available. So in one quarter some banks are up as they have been offering incentives, in the quarters where they don't have an offer on, they lose them as people switch away to banks that offer a new switching incentive. If they do work in the long term then surely there must be some banks that are loosing customers hand over fist - and others must have over time expanded their customer base significantly. I doubt this is the case though, The switching incentive, like the 0% fee free balance transfers will disappear over time.

If people were limited to one current account in total then perhaps your logic would follow.  But people are allowed multiple current accounts (across institutions as well as within them) which means there doesn't have to be a one-in-one-out flow.

Other people follow the CASS figures more carefully than I do so may chip in with some hard data, but IIRC the total number of current accounts on Nationwide's books has gradually increased - also bearing in mind switches in/out is not the only way a bank can gain or lose current accounts.

Albermarle

 I doubt this is the case though, The switching incentive, like the 0% fee free balance transfers will disappear over time.

As a previous poster alluded to, their marketing dept would be out of a job. These incentives maybe be partly driven by internal targets/politics/ambitions / people justifying their existence etc as much as anything else.

boingy

I've had a Flex-account and a savings account since 1982 but I don't qualify for the "fairer share". Strange, really.

Exodi

Respondents on Facebook to this news were spitting feathers over the eligibility criteria (which is not suprising), however I am suprised at the relatively similar reaction here, considering the different demographic.

I even saw one poster taking issue that the eligibility period was in the past...

For those asking why they didn't communicate their eligibility criteria beforehand, the bonus is aimed at rewarding their loyal members. It would have been counter-intuitive to announce these terms in January, have everyone from MSE rush over to open an account for two months, depositing the absolute bare minimum and vanish after the £100 bonus was paid.

boingy said:

I've had a Flex-account and a savings account since 1982 but I don't qualify for the "fairer share". Strange, really.

Are you saying you meet the eligibility criteria, but they're not paying you or that you do not meet the eligibility criteria? Having an empty savings/current account (for example) does not classify you as an 'active member'.

Section62

Exodi said:

For those asking why they didn't communicate their eligibility criteria beforehand, the bonus is aimed at rewarding their loyal members. It would have been counter-intuitive to announce these terms in January, have everyone from MSE rush over to open an account for two months, depositing the absolute bare minimum and vanish after the £100 bonus was paid.

In which case it was also counter-intuitive to announce the same distribution is likely to be made next year as well.

Some time around January 2024 someone will remind all us MSE'ers that having a Nationwide current account and jumping through some hoops, as well as a modest deposit in a savings account, will open the door to the possibility of a free £100.  Everyone from MSE then rushes to open an account, etc etc....

I'm with the person who suggested the criteria should have been published in advance.  Nationwide is a mutual building society, we should all have something approximating an equal chance of getting a payout of this kind.  The way Nationwide have gone about it, the 2023 payout approximates to a lottery.

If a stampede of account opening was feared, then there were ways Nationwide could have prevented this on a transitional basis (for 2023).

And people taking the money and running could have been prevented by making the £100 conditional on maintaining whatever level of account holding/activity until the next qualifying date.

Albermarle

Maybe if they get enough negative reaction, they will just not repeat it. So then everybody loses..........

Section62

Albermarle said:

Maybe if they get enough negative reaction, they will just not repeat it. So then everybody loses..........

That represents a basic misunderstanding of how a mutual building society works...

If Nationwide didn't pay out £340m in this scheme, the £340m would be available to distribute in a different way, or be retained to help the society weather future problems (though currently not necessary).

It would only be a case of everybody losing if the directors did something like taking the cash and setting fire to it.  And thankfully that isn't something they are very likely to do (yet).

The people expressing dissatisfaction with the current scheme don't want everybody to lose, they just want the profits from their mutual building society to be distributed in some way which feels fairer than giving everything to just 20% of the membership.