Online banking is booming with over two thirds of people (68%) saying they conducted the majority of their banking on the net last year compared to just one in five (18%) in 2005, new research from Lloyds TSB Internet banking reveals.

Over half of people surveyed (57%) say that they used Internet banking more often this year than last year with just one in ten (11%) stating that they never manage their money online.

The real surprise is that a staggering 70% of over 50s claim that Internet banking is their preferred method of money management. Conversely, younger people aged between 18 and 25 are the least likely to manage their money on the web with over a third (36%) preferring to use the telephone or go into their local branch.

The main reason respondents gave for banking online, cited by over half, is that the service is available 24 hours a day, seven days a week. Nearly a quarter like the convenience of being able to manage their money wherever they are.

Generally, Internet banking users are clued up about the things they can do online including checking their balance, paying their bills, searching their statements and transferring money between accounts. However, a quarter were unaware that they could set up and cancel direct debits and standing orders online.

Of the one in ten who doesn’t currently bank online, the main reason given was that they don’t see the need and are happy with the way they bank now (43%).

Anita Hockin, head of Internet, Lloyds TSB said: “The growth of Internet banking is phenomenal and this year is set to break records. We now have over four million registered Internet banking customers and the 2nd January was the busiest Internet banking day we’ve ever had with around ten customers logging on every second.”