What the Lloyds TSB split means to you

As the 1995 merger with TSB ends on Monday, the two brands once again go their separate ways. This is how it will affect all the existing customers

On Monday a new bank opens its doors – one that may seem familiar to anyone who was around before 1995. That was the year Lloyds and TSB merged to become Lloyds TSB. This is the month that they part again, with the Lloyds Group forced by European law to get rid of some of its customers for the sake of competition. In its place will spring up separately branded Lloyds and TSB branches. Advertising will be separate, products will change their name and – eventually – be different, and the way you can do business through your local branch may change.

For TSB customers it's farewell Cashpoints, Depositpoint and Vantage and hello to the more prosaic Cash Machine, pay in box and Enhance. But what else will it mean? Here's a guide for the almost five million customers due to be transferred to the new TSB, and the millions more left with Lloyds.

Who is being moved? The move will affect customers who hold accounts with one of the 631 branches that are being rebranded as the TSB bank. You might not necessarily run your account in a branch – all of your contact with the bank may be online – but if your account is held there, it will move over.

How do I know if I'm one of those customers? You will have received large amounts of communications from Lloyds by now, including new cards. The original plan was for Lloyds to sell the TSB branches to the Co-operative Bank, and when that was agreed it wrote to customers informing them they were being moved. That deal fell through, but the same customers are being moved from the Lloyds brand.

Will my account details change? No, sort codes and account numbers will stay the same. If you are being shifted to TSB, by now you will have received new debit and credit cards.

These still carry Lloyds branding but, from Monday, TSB-branded cards will start to be issued.

Customers will still be able to use any remaining cheques from their existing Lloyds book as the account number and sort code will remain the same. Once used, a new TSB branded cheque book will be issued.

For internet banking, you will also be able to use the same details to log in as before – although you will need to use the TSB service, not Lloyds.

However, the name of your account and things attached to it could change. If you have had a Vantage current account when you move to TSB it will be renamed an Enhance, with the same interest paid. The online Money Manager service will be rebadged Money Planner and with Lloyds owning the trademark for Cashpoint, any cash card you have will be renamed an ATM card.

Fortunately the interest rates on the accounts will remain the same and the staff should know what you're on about if it takes you a while to adjust.

My nearest branch will stay with Lloyds – can I still use it? Yes you can, but there will be some changes.

For a start, you will not be able to use the Depositpoint service at Lloyds – you will only be able to use counter and ATM services.

The ATMs will let you withdraw money regardless of who your account is with, but you will not be able to print a mini statement or transfer cash on a Lloyds ATM if you are a TSB customer, and vice versa.

When you pay cash in over the counter at the other bank you will have to wait for it to be credited to your account before it starts earning interest or you can draw on it. Broadly speaking, once you are an ex-Lloyds customer shifted to TSB, when you enter a Lloyds branch you will be treated as if you are the customer of any other bank, such as Barclays or HSBC.

Will my money be safe in this new bank? Lloyds says the new TSB bank will be strong, with a loan book that matches the amount of money held on deposit.

None of the bad bits of Halifax Bank of Scotland, which was rescued by Lloyds during the credit crunch, will be on its books.

TSB will get its own banking licence so you will get separate protection for money held there and any accounts you may still have with Lloyds. Under the Financial Services Compensation Scheme you will have £85,000 of savings protected with each brand.

Will I still get the same deal on my savings and mortgages? Yes, but only for now.

Lloyds says that customers will continue with the same deals until the TSB bank is sold off to another buyer or floated on the stock market.

Anyone in a deal with fixed terms and conditions – for example, someone on a fixed-rate mortgage – will continue until the end of their contract.

Initially, TSB products will mirror Lloyds TSB's offering but, over time, TSB will look to offer its own products.

A Lloyds spokeswoman says: "TSB will be independent and therefore will set its own product pricing. However, it is likely that interest rates will remain aligned between TSB and Lloyds for a period of time after launch to simplify things for customers."

What if I don't want to move? You can apply for a new current account at Lloyds and switch back. Lloyds is not allowed to encourage people to stay, as the object of the exercise is to reduce its share of the current account market, but it is not banned from taking you back.

My account is staying at Lloyds – will there be any changes? The number of branches that you can use will be reduced to 1,300 and you will lose some services at your local TSB (see above). Otherwise, things will work as they always have.

What does this mean for competition in the current account market? There has been much talk about the need for new brands to enter and shake up the market, but progress has been slow.

Metro Bank has launched, but it has few branches so far, while the Co-op's attempt to be a "challenger" bank has hit the buffers.

When the announcement was made that Co-op would no longer be taking on the Lloyds branches, Derek French of the Campaign for Community Banking Services said he believed the new network of spun-off branches "is not credible as a challenger on its own" because they are concentrated in the north of England.


Hilary Osborne

The GuardianTramp

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