Lloyds Bank to increase current account fee – should you switch?

Lloyds Bank is increasing the fee on its Club Lloyds account from June, which could cost some customers an extra £24 a year.

While this might be a blow for loyal customers, Lloyds is also scrapping foreign transaction fees on debit card payments, making it cheaper to use your account abroad.

Here, we reveal what’s changing, how Lloyds compares to other banks, and whether it’s worth switching.

Changes to Club Lloyds accounts

Club Lloyds is a fee-paying current account that offers an annual 'lifestyle benefit' and exclusive interest rates. From 2 June, the monthly fee for the account will increase from £3 to £5. 

This fee is waived for customers who pay in at least £2,000 per month. The payment can come from a salary, pension, benefits, or multiple smaller deposits.

From 14 April, Lloyds is also removing foreign transaction fees charged on payments made abroad.

Club Lloyds customers currently pay a 2.99% foreign transaction fee plus a 50p foreign purchase fee. These charges will no longer apply when making debit card payments or withdrawing cash abroad, either in a foreign currency or pounds. 

The changes won't affect exchange rates, and some ATM providers may still charge their own fees.

Finally, Lloyds is doubling its interest-free overdraft buffer from £50 to £100 from 14 April, meaning customers won’t be charged interest on the first £100 of their arranged overdraft. 

• Find out more: best banks and bank accounts 2025

Why is the fee going up?

Lloyds Bank told Which? the increase reflects the rising cost of providing the account and its benefits, and is the first price change for eight years.

The bank said: ‘Our Club Lloyds range offers customers lifestyle benefits including Disney+, cinema tickets, and magazine subscriptions, as well as access to market-leading mortgage and savings rates. 

'From 14 April, customers will be able to spend on their debit card abroad without any fees. Almost 90% of our customers get these benefits for free each month.’

Existing Club Lloyds customers will be notified from March, with at least two months’ notice given before the changes take effect.

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What else does Club Lloyds offer?

Club Lloyds customers can choose one lifestyle benefit per year from the following options:

• a 12-month Disney+ subscription
• six cinema tickets for Odeon or Vue
• an annual magazine subscription
• a Coffee Club and Gourmet Society membership, which includes discounts at Caffè Nero, Pizza Express and thousands of independent restaurants.

The account also pays monthly credit interest on balances up to £5,000, as long as at least two direct debits are paid from the account each month. 

Balances between £1 and £3,999.99 earn 1.50% AER (1.49% gross p.a.), while balances between £4,000 and £5,000 earn 3.00% AER (2.96% gross p.a.), both variable and paid monthly.

Club Lloyds customers can also open a Club Lloyds Monthly Saver, saving between £25 and £400 per month at a fixed interest rate of 6.25% gross/AER for 12 months. Withdrawals are fee-free, and the interest rate remains fixed throughout the term.

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Is Lloyds a good banking provider?

In our latest survey, Lloyds Bank received a 75% satisfaction score, placing it joint 7th out of 20 providers. 

It earned five stars for its online banking service, and four stars for its mobile banking, branch service, contacting customer service and its application process.

In our review of online banking security, it ranked 7th out of 11 providers, scoring 69%.

• Find out more: how safe is your bank account?

Should you switch your bank account?

If you're unhappy with the Club Lloyds changes, or you're looking for a better deal, several banks are offering cash incentives to switch. 

Here’s the current deals on offer:

• Co-operative Bank (£150 incentive): The 'Standard' current account offers cashback on spending, while the 'Everyday Extra' account (£15 monthly fee) includes worldwide travel insurance, UK & European breakdown cover, and mobile phone insurance.
• Nationwide (£175 incentive): The fee-free 'FlexDirect' account offers 5% AER interest on up to £1,500 for the first year, while the 'FlexPlus' account (£13 monthly fee) offers the same rate plus travel insurance, mobile phone insurance, and breakdown cover.
• First Direct (£175 incentive): The '1st' Account has no monthly fee, a £250 interest-free overdraft, and fee-free spending abroad.

Alternatively, if you like the sound of Club Lloyds perks, you might want to move your banking to Lloyds instead. Lloyds Bank is currently running its own switch deal worth £175 if you open a Club Lloyds account before 1 April.

• Find out more: best switching deals February 2025