UK Banking: Are January sales all they're cracked up to be?

It has become something of a Christmas tradition in the UK, we wake up early on the 26th December and head to town with our spending money and vouchers on a mission to find bargains in the January Sales. However, this year saw not only clothes and supermarkets getting in on the sales action, but many high street banks had sales boards in their windows too. So what do bank sales really offer the average saver?

With continuing low interest rates (base rate has now been at 0.5 percent for nine months) and rising inflation, many banks are seeing the New Year as a great opportunity to entice new customers to their products and to reward existing savers eager to stay with them. Consequently, incentives themselves are varied - from cash back to bonus services, as well as being available on a diversity of products - from the highest interest fixed accounts to the humble savings account.

However, such sales have been criticized by some as they can lure customers who won't really benefit - and can also be overly complicated with little saving in the long term. For example, some banks are offering insurance services available at a cut price for a number of months - but will increase in monthly cost for the remainder of the year, whether the individual needs the cover or not.

Andrew Haggar at Moneynet has been quite outspoken about his opinion of bank sales, stating: "Bank sales are little more than a marketing gimmick, most customers would prefer a consistently good deal from their provider, rather than just for a few weeks each year."

However, £100 cash back for re-aligning your savings habits a little is surely something most of us can enjoy, and it seems that shopping around is the first step to ensure that you are in the most sensible savings shape for the new year. If you already have an account with a certain bank, check what they have available to existing customers - then see what their competitors offer regardless of whether they are on the 'Sales Boat' or not. Based on the current industry, savers who are most likely to benefit are those who choose to put their money into fixed accounts or bonds in the new year.

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Paul Roberts writes about banking advice and the complexities of saving, from fixed accounts and high interest savings account to the simplest savings account.