Lloyds and TSB split: What does it mean for you?
Millions of Lloyds TSB customers have been transferred to TSB bank from today in one of British banking's biggest shake-ups.
Related MSE Guides
Of Lloyds TSB's 1,931 branches across the UK, 631 are now branded as TSB. 4.6 million customers – including those of Lloyds TSB Scotland and Cheltenham & Gloucester – have been moved to the new bank (see our Best Bank Accounts guide for the top deals).
All the remaining Lloyds TSB branches will now trade as Lloyds Bank.
But for now, there's no change to the actual products. MoneySavingExpert.com creator Martin Lewis says: "TSB may be a new bank today, but it doesn't have any new products.
"This means its customers are mostly sitting on the same old Lloyds bank accounts, savings and credit cards, with rates so low the best buy tables giggle with mirth.
"So while concerns about safety are limited, and it's too early to tell how good its customer service is – this is a great opportunity to ditch Lloyds and TSB for something better.
"Right now, First Direct is paying new banking customers £125 to switch to it, Barclaycard is letting you shift debts for 28 months 0% (3.5% fee) and Britannia is offering 1.75% easy access savings."
Both Lloyds Bank and TSB will remain part of Lloyds Banking Group (LBG) until TSB is floated on the stock exchange, which is expected to take place next year.
We explain what's happening below.
Who's been switched to TSB?
Of the 1,931 Lloyds TSB branches, 631 have become TSB branches. The others stay with what is now Lloyds Bank. If your account or product was opened at any of the 631 branches that have been rebranded, you're now a TSB customer.
These branches have been rebranded as TSB:
- All 185 Lloyds TSB Scotland branches
- All 164 Cheltenham & Gloucester branches
- A further 282 Lloyds TSB branches in England and Wales – use Lloyds' branch checker tool to see what's happened to your local branch
Could I be a customer of both banks?
Yes. Some people will be customers of both Lloyds Bank and TSB if they opened different products at different branches.
TSB customers should have received letters before today stating which account numbers were moving to the new bank. But if you'd forgotten, or not realised the split was happening today, you're not alone. MSE Charlotte was left confused this morning about which bank she was a customer of. See her blog post for more.
I've been moved to TSB. Will my current account change?
LBG says nothing will change for those who've been moved to TSB. The product details in your terms and conditions will remain the same, account numbers and sort codes will remain the same, and standing orders and direct debits will be unaffected.
Debit cards will eventually be rebranded.
I've moved to TSB. How do I access my online banking?
You'll now need to go to the TSB website to access your online banking. Your login details won't have changed.
TSB says its online banking is now back up and running after it went down this morning following the sheer volume of traffic to the site.
I've moved to TSB. Can I use the mobile banking app?
TSB customers can't use the Lloyds Bank app, but TSB has launched its own app, which is available on Android and Apple.
I've moved to TSB. Will my credit history be affected?
No. The move will not affect your credit history.
I've moved to TSB. Will my savings rate change?
LBG says nothing will change for customers who have been moved to TSB – your existing savings rate won't change and the product details in your terms and conditions will remain the same.
I've moved to TSB. Will my savings protection under the Financial Services Compensation Scheme (FSCS) change?
All TSB customers are now covered by the Lloyds TSB Scotland banking licence, which is separate from the main Lloyds Banking Group licence, which applies to Lloyds Bank.
Halifax, Bank of Scotland, BM Savings, Intelligent Finance, the AA and more, which are also part of Lloyds Banking Group, also have their own banking licence and count as one institution under this.
This means you can have up to £85,000 protected with TSB under the Government-backed FSCS, which guarantees you your money back if the bank fails.
If you have any cash saved in any of Lloyds Banking Group's other brands, this will have separate protection.
This means you could have up to £170,000 protected if you have savings accounts with both TSB and Halifax, for example.
I've moved to TSB. Will my mortgage rate change?
LBG says nothing will change for those who've moved to TSB – your existing mortgage rate won't change and the product details in your terms and conditions will remain the same.
I've moved to TSB. Will I still be able to use my Duo Avios credit card?
LBG says customers will have received a new TSB Duo Avios credit card in June and that these will work in exactly the same way as before, and the card's terms and conditions won't have changed.
I'm not moving to TSB. What does it mean for me?
Nothing will change for those staying with Lloyds Bank, LBG says.
Hang on, can I get a better deal elsewhere?
You should use this change as an opportunity to check whether you're getting the best deal with Lloyds or TSB, and to consider switching elsewhere.
Next week, a new, free, seven-day switching guarantee will come into force. It'll make sure all payments going out, including direct debits, and those coming in, such as your salary, will be moved from your old bank account to the new one within seven days.
At present, it can take between 18 and 30 working days to switch bank accounts.
If you're always in credit, our best buy current accounts include First Direct* (minimum pay-in £1,000/month) and Halifax* (minimum pay-in £750/month), which give £125 and £100 respectively to new customers switching to them, and Santander's 123* account (minimum pay in £500/month), which pays 3% interest for those with £3,000 to £20,000, plus cashback of up to 3% on bills paid by direct debit – although it does charge a £2/month fee.
If you always go overdrawn, our best buys include the First Direct* 1st Account, which has a permanent £250 0% overdraft, Nationwide's* FlexDirect account (minimum pay-in £1,000/month), which has a 0% arranged overdraft for the first 12 months and the Halifax* Reward account, which has a 0% overdraft for the first 6 months.
See our Best Bank Accounts guide for full information on all the top deals.
Will I be able to use both Lloyds Bank and TSB branches?
For now customers will be able to use both banks to carry out the majority of transactions.
This will last a couple of months, although it's not yet been decided exactly when the two networks will finally go their separate ways, and customers will only be able to use their own bank for transactions. LBG says customers will be notified when this happens.
Will TSB offer any new products?
LBG says in future, TSB may offer new products.
Why is this happening?
Government-backed LBG, which also includes Halifax and Bank of Scotland, has to offload the branches under European competition rules due to the group's sheer size.
It had been planning to sell them to the Co-operative Group, but this deal collapsed in April (see the Lloyds branch sale to Co-op collapses MSE News story).
For more details on what the split means for Lloyds and TSB customers, see this TSB Q&A.
* Using these links helps the site stay free to use, as they're ‘affiliated links' which invisibly take you usually via affiliate linkage or commercial money sites, which then pay this site. You shouldn't notice any difference, the links don't impact the product at all and the editorial line (the things we write) is NEVER impacted by the revenue. If it isn't possible to get an affiliate link for the best product, it is still recommended and still included. The following links, First Direct, Halifax, Nationwide and Santander are identical unaffiliated links provided for the sake of transparency. Click on the following link for more details on how this site's financed.
Discuss this MSE news story: TSB opens for business