From today (November 28), millions of people across the country will be receiving letters informing them that their accounts will be moved to a new bank.
Around 3.5 million customers will have their accounts moved to a new bank, called TSB, which will be owned by the Co-operative.
The Co-op will assume ownership of 283 Lloyds TSB branches located in England and Wales, as well as 164 branches of Cheltenham & Gloucester and 185 Lloyds TSB Scotland branches.
The Lloyds Banking Group was forced to sell off over 600 branches by the European Commission after it benefitted from a bailout from the taxpayer during the economic crisis and expanded to a dominant size.
The competition authorities are behind the move which will see millions of customers being officially told via letter that their accounts are to be moved.
What effect will the switch have on my account?
Because this is a legal change, the day-to-day running of your account should not be affected. This means that at present you will not need a new debit card, credit card, account number or chequebook.
Since you will keep the same account number and sort code, standing orders will not have to be updated and salaries should continue to be paid as normal.
However, customers should be sent new debit and credit cards in the first three months of next year – although these should work in exactly the same way.
What are the benefits of switching bank account?
Some customers do not wish to switch bank accounts, and when the transfer is formally agreed next year, Lloyds will contact all of those affected once again to explain how they can continue banking with their current provider.
However, even though accounts terms and conditions will probably remain the same during the switch, over time it is more than likely that some accounts will be merged or replaced with new offers – meaning that customers could witness a change in interest rates.
If the rates go down, customers may find themselves wanting to switch bank accounts to get a better rate on their hard-earned savings.