Santander 123 Lite alternatives

The days of 3% cashback on bills are over

Nearly three years ago, Santander replaced it’s popular 123 and 123 Lite current accounts with the Edge and Edge Up – but existing customers could keep these accounts open, and keep earning. But that’s changing this summer if you have the Lite version.

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What were the 123 accounts?

These two current accounts from Santander offered up to 3% cashback on household bills.

• 1% on Council Tax, phone, mobile, TV and broadband bills and Santander mortgage repayments
• 2% on gas and electricity
• 3% on water bills 

Though you had to pay a fee each month, you should have earned enough to clear that and make a profit.

Our preference at Be Clever With Your Cash was for the cheaper 123 Lite at £2 a month. The more expensive 123 account, at £4 a month, offered interest on savings, but that rate could easily be beaten elsewhere.

These were closed to new applicants in September 2022, but anyone who still had an account has been able to continue using it and earning the cashback – until now.

What’s happening to existing accounts?

In early June 2025, customers, including myself and members of our Facebook community, received letters in their online banking apps saying their existing 123 Lite account will be converted into a Santander Everyday current account on 21 August 2025. The same information is also on the Santander website.

On this date you’ll stop paying the monthly fee associated with the 123 Lite account, but you’ll also stop earning cashback on your eligible bills.

However, it won’t affect those with the full 123 account. We approached Santander who said there’s no change for existing 123 current account holders.

What should you do?

If you have the 123 Lite account, you don’t have to do anything – it’ll happen automatically. Remember the account isn’t being closed, it’s just being transferred into an Everyday account. This means there’s no impact on your credit score, your account number will not change, and there’s no need to worry about existing payments in and out stopping.

However keeping the Everyday account won’t benefit you at all. It’s just a bog standard current account with no perks. So it might be wise to change it.

You could choose to swap to the Santander Edge or Edge Up which both offer cashback on bills – more on these in a moment. If you decide to do this your account number will stay the same.

Sadly very few other accounts offer cashback on bills, and I’ve detailed them below. If they don’t appeal then you might want to take advantage of features from other banks.

Other accounts paying cashback on bills

Santander Edge or Edge Lite

You can choose to upgrade your account to one of the Edge accounts. These are similar but not as good. For a start they cost more. The Edge is £3 a month and the Edge up is £5 a month.

You also get less cashback. It’s just 1% on each qualifying bill, and there’s a cap on each category too – though you’ll need massive bills to go past these with this rate. The cap is £10 for the Edge and £15 for the Edge Up.

Personally I would only look at the Edge and not the Edge Up. The extra £2 a month doesn’t get you anything special in return.

For me, moving from the 123 Lite to the Edge would see my annual profit after bills fall from around £80 to around £30 – a £50 drop per year. Still, that’s £30 I wouldn’t have if I decide to pay my bills from a non-cashback account.

Plus there’s the added benefit of the 6% paying Edge Saver account you get with the Edge current account (not the Edge Up). This is only for 12 months and only on up to £4,000 – but you can close it after a year and open another one very easily.

If you still have the full 123 account, you can keep this open as normal for now. You’ll pay £1 more for this each month than the Edge account, so you’ll want to calculate whether the increased cashback on your bills will cover this.

If you want to know more, I’ve written a fuller comparison of the Edge, Edge Up, 123 and 123 Lite

Zopa Biscuit

Zopa recently launched a new current account called Biscuit that offers 2% cashback on direct debits, but it’s capped at £1,500 total spend (so roughly £125 per month on average). This means you’ll be up by £30 over the year.

So though it might cover some of your bills, it’ll be less than you got with the 123 Lite. Here’s how Zopa Biscuit compares to the Santander Edge current account.

Other current accounts with rewards

Banks with switching offers

If you don’t want to stick with Santander you can easily move your direct debits to another account using bank switching – and that’s likely to be most profitable in the first year as you’ll be able to take advantage of bank switch offers with free cash.

Banks with rewards

There are a handful of accounts that will give you a monthly freebie or perk, though these will have conditions you need to meet each month and sometimes a fee.

I rate the Club Lloyds account for the free Disney+ with Ads for six cinema tickets each year, which should be fee-free as long as you deposit £2,000 into the account each month.

Or, the Monzo Perks account offers a free annual railcard, free Uber One, a free Vue ticket each month and a free Greggs treat every week. You pay £7 a month, but if you’d pay for half of the freebies anyway that should be more than covered.

Other bank accounts with benefits

If these don’t take your fancy, then there are other reasons to move your banking elsewhere.

Chase still offers 1% cashback on supermarket and transport spending, while a First Direct has a 7% paying regular saver.

Or there’s Nationwide which has been paying out £100 “Fairer Share” member bonuses each year for the last few years, and that could continue.

I also rate both Monzo and Starling for their easy to use apps.