Sainsbury's Bank to withdraw from market - what does it mean for you?

Sainsbury’s Bank eventually plans to wind down its banking operations, but there are no immediate changes for customers. 

Following a strategic review, Sainsbury’s said it's planning a ‘phased withdrawal’ of its core banking service over time, and will instead focus on its retail business which includes its supermarket stores, Argos and Habitat. 

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

Here, we explain what’s happening to Sainsbury’s Bank, and what existing and new customers need to know.

What's happening to Sainsbury's Bank?

The supermarket revealed its intention to wind down the financial services it offers through Sainsbury’s Bank and is exploring ‘a number of options’. 

A statement said: ‘Financial services products that we continue to offer in the future will be provided by dedicated financial services providers, through a distributed model. We already do this successfully with our insurance products.

'Over time this will result in a phased withdrawal from our core banking business.’

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. 

Therefore it's possible we could see credit cards and loans provided by a third party in future, and sold through Sainsbury’s in a similar way. 

• Find out more: best banks and bank accounts of 2024

When will this happen and what will it mean for existing Sainsbury's Bank customers?

Right now, no timeline has been given by Sainsbury’s on when we can expect these changes.

Sainsbury’s Bank told us it was ‘business as usual’ for now, with no immediate changes to products. This means existing or new customers don’t need to take any action.

The 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.

• Find out more:  FSCS: are my savings safe?

Make your money go further

Find the best deals, avoid scams, and grow your savings with our expert guidance. From only £4.99 a month.

Join Which? Money

Cancel anytime.

Is Sainsbury's Bank a good provider?

In our latest analysis of the best savings providers, Sainsbury's Bank came joint 25th out of 37 providers with a customer score of 65%.

It currently offers seven accounts including instant access, fixed rate and Isas, but none offer market-leading rates. 

If you’re looking to open a new savings account, you can check out our rundown of the best savings account deals for January, and find out which firms are Which? Recommended Providers.

When it comes to credit cards, Sainsbury’s Bank came joint fourth out of 31 brands in our survey of the best credit card providers 2024. 

It received an excellent customer score of 75%, but its current range of deals didn't meet the benchmarks in our product analysis to make it a Which? Recommended Provider. 

Sainsbury's Bank currently offers two credit cards - one 0% balance transfer deal and a separate everyday spending credit card.

You can also earn Nectar points with any Sainsbury's Bank credit card. You'll 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.

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