Santander Edge customer? It's axing its 1% cashback on spending

Santander's Edge Current Account has long been one of our top-pick bank accounts for cashback. If you deposit £500 a month and pay a £3 monthly fee, you can earn cashback of up to £10 a month on bills and up to £10 a month on some debit card spending; so £20 a month in total. This has made it a lucrative option for many, especially families whose bills and food shops are typically higher. However, this is set to change, as we explain below.

In addition, Santander will close its 123 Lite current account – which costs £2 a month and pays up to 3% cashback on bills, but not on spending – and move existing customers to its Everyday current account from 21 August. The Everyday account is free to hold but doesn't pay cashback.

The announcements come just over a month after competitor Chase reduced its cashback offer from 1% on almost all debit card spending – including overseas – to 1% on just UK grocery, travel and fuel spends.

The key change: Cashback on debit card spending is being axed

From 9 September, Santander's Edge account will no longer offer 1% cashback on grocery, fuel and travel spend done on its debit card. This will apply to both new and existing customers.

The same change will also apply to the Santander Edge Up account. This comes with a higher £5 monthly fee, but offers 1% cashback up to a larger maximum of £15 a month on bills and spending (so £30 a month total).

Santander is writing to Edge and Edge Up account holders to explain the change, stating that it's because "the cost of offering cashback has increased". It added that "making this change lets us continue providing the account".

Not changing: You'll still earn cashback on bills

Santander says this change will not affect the Edge account's 1% cashback on the following household bills (subject to any existing exclusions):

• Broadband and paid-for TV packages.

• Council Tax.

• Gas and electricity bills.

• Mobile and home phone.

• Water bills.

You can find out which suppliers you can get cashback from on Santander's website.

Use Santander's online calculator to check whether you'll still earn more cashback on bills alone than the £3 (or £5 for Edge Up account holders) monthly fee. If you won't, see our round-up of the Top bank accounts for cashback and perks. You can also consider combining different current accounts to maximise your cashback earnings.

Want to earn cashback on spending? Alternatives to consider

The top current account that pays cashback on spending is Chase. It offers 1% cashback on groceries, travel and fuel spends up to a maximum of £15 a month. There's no account fee or minimum pay-in, and you don't need to switch to it.

Or (or in addition), you can also earn cashback, points and more on almost all spending (not just groceries and travel) with a rewards credit card, though you must clear these IN FULL every month – or the interest could wipe out any cashback you earn. See our Credit card rewards guide for further details.