11 Sept 2024

Nationwide and Santander current account fee changes - what you need to know

Find out what the Nationwide FlexPlus price hike and Santander Edge fee refund could mean for you

Nationwide is hiking the fee on its popular FlexPlus packaged current account by £5 a month from 1 December.

The changes follow price increases from Lloyds and NatWest on some of their packaged accounts over the summer.

In better news, Santander has launched an offer that effectively waives the £3 monthly fee on its Edge account for 12 months.

Here, Which? explains how the latest current account fee changes could impact your finances and whether you should stick or switch.

Please note that the information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms and conditions of the current account provider before committing to any financial products.

Nationwide FlexPlus fee hike

The building society is increasing the monthly fee on its FlexPlus packaged account from £13 to £18 from 1 December 2024.

The change will mean customers will pay £216 a year, instead of £156 - an extra £60.

Why is the fee going up?

Nationwide says it's the first time it has increased the price of the account since 2017.

In a message to customers, the building society explained: 'We have kept it at this amount for as long as we could, but over this period the cost of providing insurance has risen significantly. This means we now need to adjust the fee.'

Is the account still worth it?

The FlexPlus account topped the table in our analysis of packaged accounts earlier this year. It achieved an overall score of 81% and at the time was the second-cheapest packaged account we analysed.

The new fee, however, means packaged accounts from the Co-operative Bank, Halifax and Virgin Money will cost less.

But the FlexPlus perks, which include worldwide family travel insurance, family mobile phone insurance and vehicle breakdown cover will remain the same and Nationwide says the account will still offer value for money compared to buying separate policies.

Our experts rated the Flexplus travel insurance very highly and it doesn't have any age limits. The account also got top policy scores for mobile insurance and breakdown cover, and we found it was one of only three packaged accounts to offer fee-free cash withdrawals and spending abroad.

Find out more: best packaged bank accounts

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Santander Edge fee discount for a year

Santander is effectively waiving the monthly fee on its Edge current account for 12 months.

The bank will now pay anyone who opens the account a cash payment of £36 - covering the normal £3 monthly fee for a year, without having to switch.

The Santander Edge account is not a packaged account like the Nationwide FlexPlus deal, as it does not offer insurance perks.

Instead, it offers cashback on household bills and certain types of spending. You can earn 1% cashback, capped at £10 a month, for debit card spending on ‘essential’ grocery shopping and transport. It also pays 1% cashback, capped at £10 a month, on household bills paid via direct debit such as council tax and gas and electricity bills.

As well as the chance to earn up to £20 cashback, the account offers fee-free spending abroad and exclusive access to the Edge Saver instant access account, paying 6% AER on balances up to £4,000 for 12 months.

You'll need to pay in at least £500 each month to keep the benefits, plus have two active direct debits to maintain the account and qualify for cashback.

What's in the small print?

You must open an account by 7 October 2024, but you don't have to switch to the account to benefit from the offer.

To qualify you need to deposit £500 into the account within 30 days of opening it and the account must be open on the day the £36 is paid into the account.

The money will be paid into the account 60 days after opening and the offer is available to both new and existing customers who don't currently hold a current account with the bank.

Customers who already hold a Santander current account on 8 September 2024 are not eligible for the offer, and neither are customers who have previously received an incentive payment to open a Santander Edge current account.

Should you open an account?

Santander received a customer score of 70% in our latest survey of banking customers, just above HSBC, TSB and Virgin Money.

However, if you're on the hunt for a current account offering cashback, make sure you shop around.

Chase, for example, doesn't charge a monthly fee, has a higher customer score of 79%, and offers 1% cashback (capped at £15 a month) on debit card spending for a year.

Find out more: best bank accounts for cashback

Have other banks changed their monthly fees?

Over the summer, a couple of other big banks increased fees on their accounts.

NatWest upped the price of its Reward Black (from £31 to £36 a month) and Platinum (from £20 to £22 a month) accounts on 28 June.

Lloyd's raised the charge on its Club Lloyds Silver account from £10 to £11.50 a month on 1 July.

Should you pay a fee for your current account?

Packaged accounts come with extra benefits, such as travel insurance, car breakdown cover and mobile phone insurance. In exchange, you pay a monthly fee.

These accounts only make sense if you can benefit from all the perks on offer (if you don't have a car, you probably don't need an account that offers breakdown cover) and paying for the account costs less than buying the policies separately.

Other current accounts come with a smaller monthly fee and offer perks such as cashback on spending rather than insurance or breakdown cover.

Again, you'll want to earn enough through these perks to make the price of holding the account worth it. If, for instance, you prefer to pay for groceries and transport on a credit card, or you don't have direct debits set up for your household bills, then Santnader's Edge account might not be the right fit for you.

Which? can help you do your research before switching banks and/or bank accounts.

Every year we survey thousands of customers to find out how they rate their bank so you can see how a provider stacks up before you switch. Our experts also analyse products on dozens of different elements, including fees and charges, and how you can operate the account so you can see how they compare.