Nationwide Building Society has announced an increase in monthly fees for its popular accounts, citing rising insurance costs as the primary reason. The move will impact customers who benefit from a range of services, including mobile phone insurance and vehicle breakdown cover. While some experts suggest considering cheaper alternatives, Nationwide stands by the value of its package, which remains competitive for customers seeking comprehensive coverage.
Nationwide Hikes Monthly Charges: What the £60 Increase Means for Customers
By Lydia Amazouz
Published on 26 November 2024 15:38
Nationwide Building Society has announced that from December 1, its FlexPlus bank account will see a significant price hike, with monthly charges increasing by £5 — from £13 to £18 per month. This means customers will now pay £60 more per year for access to the account’s services. The change comes as the company cites the rising costs of insurance, which have impacted the cost of maintaining the account's extensive benefits, including mobile phone insurance and breakdown cover.
The FlexPlus account has long been a popular choice for customers seeking all-inclusive banking with added benefits, but the new pricing means some may have to reassess their options. Despite the increase, Nationwide assures customers that the account will still offer competitive value when compared to similar products on the market.
The Reason Behind the Price Hike
Nationwide’s FlexPlus current account is increasing its monthly fee by £5, bringing the total monthly cost to £18, starting December 1. This increase comes as a result of rising costs in the insurance market, particularly impacting the mobile phone, breakdown, and travel insurance that are included in the account package. A spokesperson for Nationwide previously explained the price rise by saying: "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." Despite the rise, Nationwide assures customers that the FlexPlus account remains a highly competitive option in terms of both the price and the quality of the services it offers.
In fact, FlexPlus continues to stand out in the UK banking market for bundling several essential insurance products into one monthly fee, including mobile phone insurance, car breakdown cover, and comprehensive travel insurance. Many other banks and insurance providers charge extra for these services, making FlexPlus potentially more economical for customers who need these coverages. According to the spokesperson, the increase is essential to ensure the account remains viable and sustainable in light of rising operational costs.
How Does This Affect Nationwide Customers?
For customers of Nationwide’s FlexPlus account, the £5 monthly increase might raise some concerns, particularly for those who had chosen the account for its relatively low cost compared to others offering similar insurance packages. Sarah Coles, a personal finance expert at Hargreaves Lansdown, commented on the price rise, noting that the FlexPlus account will no longer be “one of the cheapest” options available on the market.
However, Coles pointed out that despite the price increase, the FlexPlus account could still offer excellent value for money for specific groups of customers. "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," she said. For customers who already rely on the included services or who have similar needs, the price increase could be justified. The £5 rise might still be a cost-effective solution compared to purchasing insurance coverage separately.
Nonetheless, Coles also highlighted other options for customers looking to save on monthly fees. For instance, she recommended the Virgin Money M account, which offers similar insurance coverage but at a lower price. "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," she advised. This is a good alternative for customers who don’t require all the benefits provided by FlexPlus or those who want to reduce their monthly banking costs.
For families, frequent travelers, or those in need of multiple types of insurance, the FlexPlus account may still represent good value for the services it provides. However, for individuals who only need a subset of the coverages offered, it may be worth exploring other options.
Navigating the Change
The £5 increase in the monthly fee for Nationwide’s FlexPlus account marks a significant change for many of its customers. While it continues to offer comprehensive services and competitive coverage, it may no longer be the best option for those who were drawn to its affordability. The decision to raise prices reflects the rising costs faced by the insurance industry and the need for banks to adjust their pricing to remain financially viable. For some customers, the FlexPlus account will still provide good value, particularly those who require multiple types of insurance. However, others may look elsewhere for lower-cost alternatives that still meet their needs.
Customers should take this price hike as an opportunity to reevaluate their banking arrangements and consider their specific needs. Whether it's switching to a more affordable option like Virgin Money’s M account or staying with FlexPlus, being aware of all available options will help ensure they get the most value for their money. This shift in the banking market could also lead to further changes in the way packaged accounts are priced and structured, offering more flexibility and choice for consumers moving forward.