NatWest to take over most of Sainsbury's Bank - what it means for you

Sainsbury's Bank is no longer accepting credit card applications from new or existing customers.

It follows the news that NatWest Group will take over the bulk of Sainsbury's Bank as the supermarket giant looks to wind down its banking operations. 

NatWest is expected to take on one million customer accounts when the sales goes through - expected to be in the first half of 2025.  

The takeover would be the latest in a string of banking mergers, including Nationwide buying Virgin Money, Barclays purchasing Tesco Bank and Coventry Building Society taking over Co-operative Bank. 

Here, Which? explains what’s happening and what existing Sainsbury's Bank customers need to know.

Which Sainsbury's Bank products are impacted?

Sainsbury’s Bank currently has around 1.9m customers and offers credit cards, loans, savings accounts and Isas, as well as insurance.

The deal will see NatWest acquire £1.4bn of unsecured personal loans, £1.1bn of credit card balances and around £2.6bn of customer deposits from Sainsbury’s Bank.

Customers are expected to transfer to NatWest in the first half of next year, but the deal is still subject to regulatory approval. 

Earlier this year Sainsbury’s Bank said it was planning a ‘phased withdrawal’ of its core banking service over time, and said it will instead focus on its retail business which includes its supermarket stores, Argos and Habitat. 

Unlike most takeovers, the seller, Sainsbury's Bank is paying to get the deal over the line. It's reported Sainsbury's Bank will pay £125m to NatWest to take on the bulk of its banking business, but the final price is yet to be decided.

• Find out more: Sainsbury's Bank to withdraw from market

What about other Sainsbury's Bank products?

The deal would not include Sainsbury’s Banks’s commission income business, which includes insurance, ATMs and travel money.

Sainsbury’s Bank said these were ‘capital-light and profitable businesses with a strong connection to Sainsbury’s core retail offer’. 

Currently, Sainsbury’s Bank insurance products are underwritten by a range of providers. For example, its life insurance is underwritten by Legal and General and its pet insurance is underwritten by Pinnacle Insurance plc. 

Sainsbury’s Bank arranges the policy with the insurer and charges a set-up fee. It also takes commission from the total annual premium and any additional products taken out. 

Argos Financial Services is also not included in the takeover. Sainsbury’s said its plans for this business would be provided at a later date.

• Find out more: best travel insurance 2024

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How will the sale impact Sainsbury’s Bank customers?  

Sainsbury's Bank continues to be regulated by the Financial Conduct Authority, which means any savings up to £85,000 will be protected by the Financial Services Compensation Scheme.

Sainsbury’s Bank credit card customers continue to be protected by Section 75, meaning purchases between £100-£30,000 have additional protection. It also means if you have any complaints over any of its financial products, you can go to the Financial Ombudsman.

However, new or existing customers can no longer apply for new credit cards. A notice on its website states for any applications already submitted will still be processed as usual. 

It added that there are no immediate changes to products or services for existing credit card customers. 

Existing customers are expected to transfer to NatWest in the first half of next year, and NatWest said new customers will be contacted in due course.

• Find out more: FSCS - how your savings are protected

Should I switch from Sainsbury's Bank?

For credit card customers, there isn’t a straightforward way to switch your credit card like there is with current accounts. 

Instead, you would have to pay off your existing card, close the account and then open a new one with a different provider. However, this could affect your credit score. 

Alternatively, you could do a balance transfer from your existing Sainsbury's Bank credit card to a new provider, but this also involves applying for a new credit card. 

If you are interested in opening a new credit card, you can find out what deals we recommend and which providers come out top for customer service in our survey of the best credit card providers 2024.

If you're looking to switch your savings, again, you would need to close the account and open a new one. You should first check your existing terms and conditions.

You can check out our rundown of the best savings deals for August and find out which firms are Which? Recommended Providers.

• Find out more: best credit card deals August 2024

Alternatives to Sainsbury's Bank credit cards

One big perk of Sainsbury's Bank credit cards is the ability to earn Nectar points. You get up to three Nectar points for every £2 spent at Argos, Habitat, Sainsbury's and Tu Clothing when you pay with the card and scan your Nectar card or app. You'll get one point per £5 spent elsewhere.

If you're looking for a credit card to collect Nectar Points, you might be better off with an American Express Nectar credit card. You earn three points for every £1 spent at Nectar partners when you pay with you card and scan your Nectar app - a much better rate than Sainsbury's own card. You get two points for every £1 spent elsewhere. It has a £30-a-year fee, though the first year is free.

If you don't exclusively shop with Sainsbury's supermarket and Nectar partners, it might be worth considering a different reward credit card. Tesco, M&S Bank, John Lewis and Asda all have tailored credit cards. You can see how they stack up in our guide to the best cashback and reward credit cards.

Is NatWest a good savings and credit card provider?

In our latest analysis of the best savings providers, NatWest came 26th out of 37 providers with a customer score of 64%. It was just below Sainsbury’s Bank, which came joint 25th. 

When it comes to credit cards, NatWest came joint 12th out of 31 brands in our survey of the best credit card providers in 2024. It received a customer score of 70%. Sainsbury’s Bank meanwhile came 4th, with a customer score of 75%.

• Find out more: Sainsbury's Bank credit card review

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This article was first published on 20 June. It was updated on 8 August to add in news about Sainsbury's Bank no longer accepting credit card applications.