Give packaged bank accounts a chance

Although the idea of paying for a bank account is irritating, the perks you get in return can be highly valuable. Ruth Jackson explains.


Take to the slopes knowing your bank has your back
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Although the idea of paying for a bank account is irritating, the perks you get in return can be highly valuable.

Hear the words "packaged bank account" and your first thought might well be "rip-off". Although many of these accounts are sold to people who end up paying a monthly fee for add-ons they never use, that doesn't mean you should write them off completely. If you find an account offering benefits you need, and it works out cheaper than buying them elsewhere, they can be a useful way of simplifying your financial products and saving you money.

One of the most popular packaged bank accounts is Nationwide's FlexPlus account. In return for a £13 monthly fee, you get 3% interest on balances up to £2,500, plus worldwide family travel insurance, worldwide family phone cover, a £250 interest-free overdraft, and UK and European car breakdown.

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One small drawback is that Nationwide has just announced it is cutting the age limit on the travel insurance from 74 to 70 from January 2019. Anyone over the age of 70 will have to pay an extra £65 per year in order to be covered by the insurance policy. Yet "even after the changes, the FlexPlus is set to remain our top pick packaged bank account", says Naomi Schraer on Money Saving Expert.

The family travel insurance, family mobile cover and Europe-wide car breakdown cover together is worth a potential £700 per year. Older people may also want to consider Co-op Bank's Everyday Extra account, says Rob Goodman in the Sun. This costs £15 a month, but comes with worldwide family travel insurance, with an upper age limit of 80, as well as UK and European breakdown cover, andmobile phone cover for the account holder.

Rewarded for being flush

However, if you have a bit of cash in the bank, or a healthy income, you could enjoy some great perks from your current account without paying any fees at all. "High-street banks are bending over backwards to attract Henrys high-earners not rich yet," says Annabelle Williams in The Times.

Instead of a fee, many premium accounts just require you to have a large income paid into the account, or a substantial amount of savings held with the same bank. All of them tend to come with the same basic benefits a higher daily ATM withdrawal limit of £1,000, free foreign-cash withdrawals and access to a free financial advisor. Beyond that, all you need to do is pick the account that comes with the best perks for you.

As well as offering exclusive rates on mortgages, loans and savings accounts, Barclays' Premier current account comes with discounts on dining out, free entry to 280 English Heritage sites and free membership to Picturehouse cinemas. To qualify for the account, you need to have a minimum individual income of £75,000 and be an existing customer, or £100,000 in a Barclays savings account.

The Citigold current account is also popular with high earners. The account comes with free annual worldwide travel insurance, including on winter sports, and is available to customers up to the age of 80. There's no fee, but you have to keep a £150,000 balance across all your Citibank accounts (including investments).

Alternatively, get a private bank account with Yorkshire Bank and you'll get special rates on residential and buy-to-let mortgages, such as a two-year discounted rate of 1.69% on up to 75% loan-to-value. This account has a £25 monthly fee and you need a joint income of £100,000 or an individual salary of £75,000.

Whichever account you decide to go with, just make sure you read the small print and are certain you qualify for the benefits and insurance on offer if you're not sure, ask the bank before signing up.

Pocket money... HMRC wants its child benefit back

Tax rises on private medical insurance policies are driving people back to the NHS, says Nicholas Hellen in The Sunday Times. As many as 200,000 patients have abandoned their private health insurance and gone back to the NHS since 2015 at a cost to the taxpayer of £126m a year, according to figures from healthcare insurer Bupa.

Repeated rises in insurance premium tax (IPT) from 6% in 2015 to 12% in 2017 have caused health insurance policy premiums to soar, and both the Conservatives and Labour have indicated they could further increase the rate to 20%. Each percentage point increase in IPT drives 31,500 private patients to cancel their cover, says the Centre for Business and Research at Cambridge University. This generates £37m in extra tax revenue, but adds £21.5m to NHS costs.

Thousands of families are being chased by the taxman after they failed to repay child benefit that they had received but were not entitled to keep, says Adam Williams in the Sunday Telegraph.

Since January 2013, parents who earn more than £50,000 a year have had to pay back some of the child benefit they receive. Those with a salary of £60,000 or more must repay the lot. You have to fill out a self-assessment form to make the repayment, but thousands of parents have failed to do so, and now HM Revenue & Customs is getting in touch to demand payment. Some of the parents are likely toface fines for late payment, inaddition to the amount to berepaid.

A shake-up of the Avios travel-reward scheme means members' perks are being cut, says Kate Palmer in the Sunday Times. All Avios accounts are being transferred to British Airways Executive Club, and anyone who collects on an American Express card with Lloyds or TSB banks faces cuts to the points they earn. Everyone will keep the points they have earned, unless they decide not to have a BA account, in which case points are valid for six months.

The popular Lloyds Avios Duo card which paid one point per £1 spent on American Express and 0.2 per £1 on Mastercard is being scrapped. Instead, there will be an Avios Rewards Mastercard paying 0.4points for every £1, with no American Express option or opportunity to earn the sought-after companion voucher (which gave an extra free ticket).

Ruth Jackson-Kirby

Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings and credit cards to pensions, property and pet insurance. 

Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.

Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping among many other titles both online and offline.