Major bank to hike fees on current accounts in weeks – are you affected?
A MAJOR bank will hike fees on current accounts for thousands of customers in weeks, The Sun can reveal.
The monthly cost for both the Lloyds silver and platinum club accounts will be going up on July 1.
Customers will soon be expected to pay an extra £18 per year for the accounts.
These are the changes Lloyds has confirmed:
- Club Lloyds Silver is now £10 a month (plus a £3 Club fee unless you deposit £2,000 each month) will rise to £11.50 a month from July 1.
- Club Lloyds Platinum is now £21 a month (plus a £3 Club fee unless you deposit £2,000 each month) will rise to £22.50 a month from July 1.
There will be no changes to any free Lloyds account with no fees.
A Lloyds Bank spokesperson: “Our Silver and Platinum accounts continue to offer a wide range of valuable benefits, including travel insurance, AA Breakdown cover, mobile phone insurance and, from July this year, fee-free debit card spending abroad.”
The hikes may seem small but it does mean both the silver and Platinum accounts will be £18 a year more expensive.
This doesnt include the £3 monthly fee which is only waived if you deposit £2,000 or more into the account.
Alastair Douglas, CEO of TotallyMoney said: “While this doesn’t sound like much, it does translate to an extra £18 per year, or in the case of the Platinum account, it can bring the cost up to more than £25 per month, or £300 per year.”
He warns: “It’s important to remember that you’re essentially paying for this.
“And if you already have phone cover, or if you carry a card which doesn’t charge you for spending abroad, then you’re really not going to see all the benefits.
“That’s because your phone is already covered, and your holiday money was already free in the first place.”
Alastair advises customers to sit down and evaluate whether or not they could get a better deal elsewhere.
He says: “There are even some current accounts which will pay you to switch, so you could end up quids in, simply for moving your money.”
What can I do about the account charge increases?
Customers can downgrade their account to an account with a lower monthly fee or to a non-fee account.
You can do this on the Lloyds app or by heating into a Lloyds branch.
Customers unhappy with the change can also close or switch their account to another bank.
There are some switching offers available at the moment which which means you could make this move and get some extra cash.
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.
What is a Club Lloyds account?
There are three types of Club Lloyds accounts:
- Club Lloyds
- Club Lloyds Silver
- Club Lloyds Platinum Account
There is a £3 monthly fee to hold a Club Lloyds account but this will be waived each month if more than £2,000 is paid into the account.
Club Lloyds account holders can choose from one of the following perks:
- 12 months of Disney+
- 6 Vue or Odeon cinema tickets
- An annual digital Coffee Club
- A Gourmet Society membership
- An annual magazine subscription
When you pay out two direct debits each month you’ll earn 1.50% AER variable credit interest on balances between £1 and £3,999.99.
And 3.00% AER variable credit interest on any part of the balance between £4,000 and £5,000.
Club Lloyds could also get a 0.20% discount off the initial rate when applying for a mortgage.
What other packed bank account options are there?
The term packaged bank accounts refers to accounts which usually have a fee but allow customers to save money in other areas like through insurance, subscriptions or cashback and overdraft perks.
Even without the fee increases the Club Lloyds accounts ranked poorly in comparison to other packed bank accounts on the market.
The Virgin Money Club M Account has a monthly fee of £12.50 a month (£150 a year) but includes family mobile phone and gadget cover, world family travel insurance (max age 74) and UK & European breakdown cover for account holders.
New customers who switch to this account will get 12% interest on up to £1,000 saved in the account for 12 months.
Meanwhile, the Nationwide Flex Plus account has a monthly fee of £13 a month (£156 a year).
The account covers family mobile phone cover, world family travel insurance and UK & European breakdown cover for account holders.
When considering a packaged bank account it’s always worth assessing which of the following if any perks would benefit you.
- Mobile phone insurance
- Travel insurance
- Car breakdown cover
- Gadget insurance
- Other perks such as an interest-free overdraft or cashback at selected retailers
Paying for these perks individually without the benefits of a packaged bank account may end up being cheaper.
So you should work out the yearly cost of all the perks you want individually before opening a packaged bank account.
What other banks are increasing charges?
Lloyds isn’t the only bank increasing fee charges on services.
NatWest is upping the fees on some of its packaged bank accounts.
The Reward Black account is going from £31 to £36 per month, and the Reward Platinum £20 to £22 per month.
The change will take effect from June 28.
Santander is slashing the rate offered on its off-sale, variable rate Easy Access Saver Limited Edition (Issue 3) account.
It currently pays savers 5.20% on balances between £1 and £250,000.
However, on May 20, the rate offered will fall by a whole percentage point to 4.20%.
All other terms of the account, remain the same and customers can access their money at any time with no charges.
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