Supermarket and retailer banks: Tesco Bank, M&S Bank and what has changed

Supermarket and retailer banks are the banking arms of shops you already know: Tesco Bank and M&S Bank are the two best known in the UK. They offer the same core products as ordinary banks, including credit cards, personal loans, savings and current accounts, and you do not have to shop in the store to use them. What makes them different is the rewards link: Tesco Bank credit cards earn Clubcard points as you spend.

The big change in this market is ownership. Tesco Bank's banking business has now transferred to Barclays, and Tesco Bank is a trading name used under Barclays' UK banking operation¹. Barclays will continue to use the Tesco Bank brand on all existing Tesco Bank banking products through a long-term strategic partnership with Tesco¹. M&S Bank sits within HSBC UK, alongside first direct³. In both cases the shop's name survives on the products, but the banking behind them is done by a large high street group.

Tesco Bank currently has 3.7 million banking accounts made up of its savings, credit card and current account products⁴. Its credit cards are held in similar numbers: 2.4 million customers manage their money with the Tesco Bank mobile banking app⁵.

Tesco Bank and M&S Bank: what each is and what it offers

Tesco Bank is the banking arm of the UK's largest supermarket chain. The bank grew out of that retail relationship: the FCA noted in a 2015 market study that Tesco Bank was among five firms, alongside Metro Bank, Sainsbury's Bank, TSB and Virgin Money, that had begun issuing their own credit cards in recent years⁸.

Its product range today covers the three main retail banking lines. Tesco Bank reports 3.7 million banking accounts made up from its savings, credit card and current account products⁴. Its credit card range includes a balance transfer and purchases card, purchase cards and a premium card⁹, and it also offers personal loans, including long-term loans and loans for specific purposes such as weddings². Tesco Bank also sells insurance under the Tesco name, which appears on the major comparison sites including Compare the Market, Confused.com, Go.Compare, MoneySuperMarket and Quotezone¹³.

M&S Bank is the equivalent arm of Marks & Spencer. It is part of HSBC UK, which also includes first direct³. Like Tesco Bank, it offers everyday banking products under the retailer's name, and its customer services line is 0345 900 0900¹⁴.

Citizens Advice confirms the general point that credit cards in the UK are available not only from banks and finance companies but also from larger supermarket and store chains¹⁵. Retailer banks are therefore a normal part of the credit card and banking market, not a separate category with special rules.

Credit cards, loans and savings from retailer banks

Tesco Bank's credit card range is built around three types. The balance transfer and purchases card combines the two functions in one card and earns 1 Clubcard point for every £4 spent at Tesco and 1 point for every £8 spent outside Tesco⁹. Purchase cards are aimed at everyday spending and earn 5 points for every £4 spent at Tesco, and 1 point for every £8 spent elsewhere¹⁰. The premium card doubles the in-store rate: for every £1 spent in Tesco (with a £1 minimum), holders get 2 Clubcard points instead of the 1 they would get with a Clubcard alone¹¹.

One restriction worth knowing: there are no balance transfers between Tesco Bank credit cards¹⁶. If you already hold a Tesco Bank card and want to move a balance, you cannot shift it to another Tesco Bank card.

On the lending side, Tesco Bank offers personal loans, including long-term loans and loans for specific purposes such as weddings². As with any lender, acceptance depends on your circumstances, and the market can tighten: in 2020, Tesco Bank temporarily withdrew its 12-month and 15-month All Round Clubcard MasterCards and its low APR Clubcard MasterCard as credit card and loan deals shrank¹⁷. Tesco Bank has also been named a Which? Recommended Provider for 2026, alongside American Express⁶.

For existing customers, account servicing is straightforward: contact, address and additional details for a credit card, loan or savings account can be updated using Online Banking or the Mobile Banking App¹⁸.

Retailer banks are not the only place to get these products, and the wider market matters when comparing options. The main current accounts guide covers the full range of everyday accounts, credit cards explains how card types differ, and loans covers how personal loans work.

Fees, charges and who can apply

There is no special eligibility rule for retailer banks: applications work as they would with any bank or card issuer, and the provider runs its own credit and identity checks. Citizens Advice sets out that credit cards are issued by banks, finance companies and larger supermarket and store chains, all under the same consumer framework¹⁵. The guides on how to open a bank account and what ID you need explain the documents and checks involved.

If a retailer bank account or card is not available, or a credit check is not wanted, fee-free basic bank accounts are a fallback. The largest banks have been required to offer them, and the list of providers has included Barclays, Santander, Royal Bank of Scotland (including NatWest), HSBC, Nationwide, Co-operative Bank, Lloyds (including Halifax and Bank of Scotland), TSB and Virgin Money (including Clydesdale and Yorkshire Bank)¹⁹. Basic bank accounts are covered in detail in the basic bank accounts guide.

On payments, all UK banks and building societies are now able to send and receive Faster Payments²¹, so retailer bank accounts are not disadvantaged on transfer speed. On security infrastructure, Tesco Bank was reported in 2021 to be in the process of signing up to a text message registry designed to combat number spoofing scams²².

Fees on retailer bank products work the same way as elsewhere: card fees, loan interest and any charges are set by the provider and must be shown before you sign up. The current account fees and charges guide explains the charges that can apply to everyday accounts, and overdraft charges covers borrowing on a current account.

Clubcard points on Tesco Bank credit cards

The rewards link is the main thing that separates a retailer card from an ordinary one. Tesco Bank credit cards collect Clubcard points at different rates depending on where the money is spent:

The premium card's doubling applies to purchases in Tesco using that card, for every £1 spent with a £1 minimum¹¹. The low APR Clubcard card earns 1 Clubcard point per £4 when shopping at Tesco, and 1 point per £4 on Tesco fuel, excluding Esso⁹.

A long list of purchases never earns points at all. The Tesco Bank premium card excludes tobacco and tobacco-related products, lottery, stamps, prescription medicines, infant formula milk, Tesco gift cards, third party gift cards, saving stamps, in-store concessions, Paypoint payments and purchases of some Tesco Bank products, and no points are earned on Tesco Travel Money, balance transfers or money transfers¹¹.

Beyond the card itself, Tesco Pay+ earned one additional Clubcard point for every £4 spent, for transactions up to £250²³. Clubcard points can also be transferred: Tesco Clubcard and Nectar points can be passed on, which matters when planning what happens to digital assets in a will²⁴. On safety, Tesco has said there has never been a breach relating to Clubcard points, but a very small number of cases have occurred where vouchers were stolen from a customer's account, and these vouchers have always been replaced²⁵.

Banking with a retailer bank: app, online, phone and in store

Retailer banks are primarily digital operations. Tesco Bank's mobile banking app runs on Apple and Android mobile devices and does not currently support any other mobile platforms or tablets²⁶. If you cannot upgrade your device, you can still manage your Tesco Bank accounts on your phone, tablet or desktop computer using Online Banking²⁶. Age UK's guidance confirms the general pattern: most banks have their own smartphone and tablet apps, available from the Google Play Store for Android and the App Store for Apple devices, once online banking is set up²⁷.

There are no bank branches in the Tesco or M&S sense, but that does not mean no cash access. According to UK Finance, 99% of retail banking customers can carry out basic banking at the more than 11,500 Post Offices across the UK²⁸. The guides on banking at the Post Office and access to cash explain what you can do and where.

Security works as it does with any bank. When Tesco Bank sends a text passcode for an online purchase, the sender shows as 'Tesco Bank' and includes the name of the company you are making the purchase to²⁹. If security details are compromised, Tesco Bank says customers must contact it immediately and change their security details straight away, which can be done by logging in to Online Banking and choosing Manage Security Details, or by contacting the bank²⁹. The mobile and online banking guide covers logins, security checks and fraud alerts in more detail.

What changes when a retailer bank is sold or rebranded

The Tesco Bank transfer to Barclays is the clearest recent example of what happens when a retailer bank changes hands. The banking business transferred to Barclays, Tesco Bank became a trading name used under Barclays' UK banking operation, and Barclays kept the Tesco Bank brand on all existing banking products through a long-term strategic partnership with Tesco¹. For customers, the name on the card and the app stayed the same; the regulated entity behind it changed.

The flow shows how Tesco Bank's banking business moved to Barclays while the brand and the Tesco partnership continued.

This pattern is common across the market. The Building Societies Association notes that of ten converted banks, none still exists as an independent entity: they are either part of a much larger bank, are a product brand, or their name has disappeared altogether³⁰. Brands can also share a banking licence: Yorkshire Bank and Clydesdale Bank are two different brands that share one licence, which matters for how deposit protection is counted³¹.

One thing to watch when anything changes is your sort code and account number. Under ring-fencing, almost one million banking customers were contacted to have their sort codes and account numbers changed³². Which? has warned that scammers exploit exactly this kind of change, so any letter about new account details is worth checking directly with your bank before acting on it³². The notice of changes page explains what banks must tell you before making changes.

Complaints and where to get help

Complaints about retailer banks follow the standard route: complain to the bank first, then to the Financial Ombudsman Service if you are not satisfied. Tesco Bank publishes complaints data covering the Tesco Bank brand, and reports its 3.7 million banking accounts in that data⁴.

On outcomes, a Which? analysis of financial complaints ranked banks by the proportion of complaints resolved in the customer's favour, and Tesco Bank scored 80% in the second half of 2016, behind Nationwide on 84%³³. That figure is dated and reflects one period, but it shows how complaint outcomes are measured and compared across the market.

Retailer banks also sell insurance, and claims patterns there are worth noting. Tesco Bank recorded 234 home insurance claims during the school spring break in 2023, up from 166 in 2022, a 41% year-on-year increase³⁴.

If something goes wrong with security or fraud, acting quickly matters. Independent Age advises contacting your bank using the phone number on the back of your card or on a recent statement if you have revealed personal information or see unrecognised activity³⁵. For M&S Bank, the direct support line is 0345 900 0900¹⁴. Surviving Economic Abuse also lists M&S Bank among banks that can help customers who need support with banking after financial abuse¹⁴.

How your money is protected

Money held with retailer banks is protected in the same way as money in any authorised UK bank, through the Financial Services Compensation Scheme (FSCS)⁶. The scheme's own guidance is clear that FSCS protects money held in all authorised UK banks, even if they do not have any branches⁷. This matters for retailer banks because most of them operate online and through apps rather than on the high street. When Metro Bank hit difficulties in 2023, the same principle applied: it was a UK-regulated bank and money in customers' accounts was fully covered by the FSCS³⁶.

The protection depends on the bank's authorisation, not its shopfront. Where two brands share one banking licence, as Yorkshire Bank and Clydesdale Bank do, deposits across those brands count together towards one limit rather than separately³¹. The FSCS protection page explains how the scheme works for current accounts and where it stops.