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Nationwide to hike fee on popular bank account this week – is it time to switch?
Find out how to switch bank accounts below
NATIONWIDE is hiking the fee on one of its most popular current accounts - we reveal whether it's time to ditch and switch.
The major building society is increasing the charges on its FlexPlus packaged bank account which comes with a host of additional perks.
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Banking customers with the account get worldwide travel insurance, mobile phone insurance and preferential rates on loans and overdrafts.
Account holders can also use their debit card abroad without incurring non-sterling transaction fees.
As it stands, FlexPlus customers pay £13 a month, or £156 a year, but this will change from December 1.
After this date, the monthly fee will be hiked to £18 a month - a £5 per month or £60 a year rise.
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A spokesperson for Nationwide previously told The Sun the rising cost of insurance was to blame for the increase.
They added: "Even after this change, FlexPlus will continue to be one of the UK’s most competitive packaged current accounts, both in price and quality of cover."
Travel insurance, mobile phone insurance and breakdown cover have all increased significantly over the last four years.
This is due to the cost of providing cover rising, in part due to high medical costs abroad, more frequent claims and the impact of coronavirus.
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In April, ABTA's research revealed medical repatriation costs had more than doubled since 2019.
More people are claiming on their travel insurance policies too, which can see premiums pushed up.
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Figures from the Association of British Insurers (ABI) revealed insurers processed 574,000 travel insurance claims in 2023, with total payouts reaching £511million.
That's up from 362,000 claims in 2022, when total payouts amounted to £352million.
Is it worth switching?
Sarah Coles, personal finance expert at Hargreaves Lansdown, said the £5 hike on Nationwide's FlexPlus account means it will no longer be "one of the cheapest" on the market.
However, she added it could still offer good value for money, depending on your circumstances.
"This is particularly the case for families who plan more than one holiday this year, have smartphones that need insurance and who would otherwise buy car breakdown cover."
It could be worth switching to Virgin Money's Club M account though, Sarah said.
The account fee is £12.50 a month, it comes with free gadget insurance, worldwide family travel insurance and UK and European breakdown cover, and there's no minimum pay in.
Sarah said: "If you want a lower monthly charge, you can get the Virgin Money M account which comes with similar cover.
"Just check you’re happy that you still get what you need.";
What are packaged bank accounts?
Here's everything you need to know about what they are, how to get the best deals and if they're worth it.
Packaged bank accounts are current accounts that come with added extras like insurance, cashback at retailers and interest-free overdrafts.
Some offer more favourable rates on home loans, overdrafts and credit cards too.
It's hard to make straight comparisons between packaged accounts because they all offer something slightly unique.
However, you can check comparison sites like Which?, MoneySavingExpert.com and MoneySupermarket, which will show the fees and key features of an account to help you figure out which one best suits your needs.
Sarah Coles, personal finance expert at Hargreaves Lansdown, also said it's crucial to check the small print of any packaged account.
That means checking for any age limits for coverage, or if there are any conditions you're not covered for on travel insurance.
Sarah said: "Whether packaged accounts offer decent value will depend on your circumstances and the cover you usually pay for.
"It’s why it’s so important to look beyond the price at the full offering."
You can find out more about Virgin's account via uk.virginmoney.com/current-accounts/pca.
If Virgin Money's account doesn't suit you, you could try one of the below.
Co-op Bank
Co-op Bank's Everyday Extra packaged bank account costs £15 a month or £180 a year.
This product offers worldwide family travel insurance for those up to the age of 79.
It also includes mobile phone and UK and European breakdown cover for the account holder.
Customers do not need to make a minimum monthly payment to qualify for the account.
To find out more, visit co-operativebank.co.uk/products/bank-accounts/packaged-bank-account.
Lloyds
Lloyds' Club Lloyds Silver account has an £11.50 monthly fee and comes with a host of perks.
You have to put in a minimum of £2,000 a month to get the £11.50 price though, otherwise it's £14.50 a month.
You get mobile phone cover included with the account, Europe and UK family travel insurance and UK roadside breakdown cover.
Customers can also choose an annual reward as standard, including 12 months of Disney+ and six cinema tickets.
To find out more, visit lloydsbank.com/current-accounts/all-accounts/club-silver-account.
Halifax
Halifax's Ultimate Reward package bank account costs £19 a month or £228 a year.
Customers do not need to make a minimum monthly payment to qualify for the account.
The product comes with free gadget insurance, worldwide family travel insurance, UK breakdown cover and home emergency cover.
Customers can also receive additional rewards if they pay in at least £1,500 a month into the account.
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You can choose from £5 a month cash, a Vue cinema ticket, or three digital magazines.
To find out more, visit halifax.co.uk/bankaccounts/current-accounts/ultimate-reward-current-account.
How do I switch bank accounts?
SWITCHING bank accounts is a simple process and can usually be done through the Current Account Switch Service (CASS).
Dozens of high street banks and building societies are signed up - there's a full list on CASS' website.
Under the switching service, swapping banks should take seven working days.
You don't have to remember to move direct debits across when moving, as this is done for you.
All you have to do is apply for the new account you want, and the new bank will tell your existing one you're moving.
There are a few things you can do before switching though, including choosing your switch date and transferring any old bank statements to your new account.
You should get in touch with your existing bank for any old statements.
When switching current accounts, consider what other perks might come with joining a specific bank or building society.
Some banks offer 0% overdrafts up to a certain limit, and others might offer better rates on savings accounts.
And some banks offer free travel or mobile phone insurance with their current accounts - but these accounts might come with a monthly fee.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
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