MARKS & SPENCER stepped up competition in the banking sector today by launching its first no-fee current account.

M&S Bank, which has 3.7 million customers, launched its first current accounts 18 months ago but these were "premium" products which charged fees of £120 to £210 a year for a package of perks.

The new account comes with an automatic £500 overdraft, the first £100 of which is free. It will also offer loyalty points which customers can spend in Marks & Spencer stores, while those switching to the new account will receive a £100 gift card.

Loading article content

The moves are part of a pattern which has seen new lenders come into the market in recent years to challenge major high street banks.