NatWest and RBS to scrap bills cashback – what you need to know

At the moment, for a fee, customers with the sister banks' various Reward accounts earn 2% cashback on seven household bills: council tax, gas, electricity, water, mobile, TV and landline packages, and broadband, if they're paid by direct debit.

The Reward accounts include packaged bank accounts, where for a fee you get a range of insurance products, and Premier accounts, but we've focused immediately below on the standard Reward account as it's been very popular among MoneySavers. See further down for how other Reward accounts will change. 

See our Best Bank Accounts guide for more, including how to get a free £175 for switching. 

What is the standard Reward account? 

It's offered by NatWest and Royal Bank of Scotland (RBS) and was our top pick for ongoing bills cashback, as it offers the 2% on seven household bills – plus right now it also has a £150 switch incentive. 

But from 1 February 2020, customers will receive £1/month for logging into their mobile app, and £4/month for having two direct debits of at least £2 each, instead of bills cashback. The changes mean the incentive will be capped at £5/mth whereas currently cashback isn't limited.

The £2 monthly fee will remain, so the max total reward will be £3/mth or £36/yr.

Will I be better or worse off under the changes?

It's likely the majority of standard Reward customers will earn less under the new system.

From February, as we say above, you can earn £36/yr in rewards cashback. Under the current system, the bills cashback you earn depends on how much you spend on bills, meaning you need to spend about £250/mth (£3,000/yr) on eligible bills to end up with £36/yr in rewards after the fee.

Yet NatWest, which includes RBS, says its average customer currently gets £59 a year in rewards after the fee, so it’s likely the majority of Reward customers will earn less under the new system.

However, if you only pay a couple of bills a month by direct debit, or have very low bills, then the new cashback system may actually work out better for you. 

We asked NatWest to say what proportion of its Reward account customers will be worse off under the new reward scheme, but it couldn't say.

Am I better off switching? 

See this as a trigger to check if you can earn more elsewhere – and indeed many can, eg, the free £175 to switch to HSBC.

Our Best Bank Accounts guide has full help on the best accounts to choose.

'This will be a kick in the teeth for some people'

MoneySavingExpert.com Banking Editor Helen Saxon said: "This is yet another example of a long line of banks making it less attractive for customers to stick with accounts that have served them well in the past.

"It's likely that a lot of people moved to the standard Reward account specifically for the bills cashback and this will be a kick in the teeth for those people. But the good news is many will be able to earn more than £36 a year by switching account."

What about the other NatWest and RBS Reward accounts? 

Reward Silver, Reward Platinum, Premier Reward and Premier Reward Black customers also currently earn 2% cashback on seven household bills.

The bills cashback is also being scrapped on these accounts, and being replaced with incentives for logging into the mobile app and having direct debits. Here's how the incentives will change from 1 February 2020:  

• Reward Silver and Reward Platinum customers can earn £5/mth. These packaged bank accounts offer perks such as mobile and travel insurance for a monthly fee. The changes are the same as the standard Reward account above, and mean customers will receive £1/mth for logging into their mobile app, and £4/mth for having two direct debits of at least £2 each. 

• Premier Reward and Premier Reward Black customers can earn £10/mth. The Premier accounts have monthly fees and are for those with high incomes. The changes are similar: customers will get £1/mth for logging into their mobile app, but can get £9/mth back for having two direct debits of at least £4.50 each. Depending on how much cashback they currently earn from their bills, many could be better off under the changes. 

NatWest has told us that there are no further changes to the Reward current accounts planned, so customers will continue to earn at least 1% back in rewards on spends with the bank's partner retailers, including the likes of Caffè Nero and Europcar.We have also asked if there'll be changes to the Reward credit card and will update this story when we know more. 

What does NatWest say?

A NatWest spokesperson said: "We are changing our Reward accounts so our customers will know exactly how much they will receive each month.

"Interest rates are expected to remain lower for longer. This change ensures we can continue to offer our customers a monthly reward."