THE worst packaged bank accounts for offering poor savings and limited insurance cover have been named and shamed in a damning new report.
Consumer champion Which? has rated and slated 13 accounts by high street banks and revealed how thousands of customers might not be getting as good of a deal as they’d like to think.
At the bottom end of the table, one packaged account only offers customers £16 a year savings on perks compared to the best which has potential savings of an impressive £180.
Which? also found a number of providers are increasing the fee for packaged accounts without offering additional or upgraded benefits.
Experts are now warning customers to look at exactly what is on offer to make sure they would make use of all the benefits available to get the most for their money.
A packaged bank account consists of additional goods and services, usually for a monthly or annual fee.
The optional extras typically include at least one insurance product and a variety of other services like car breakdown cover.
Which? compared the quality of core elements usually found in packaged accounts – travel insurance, car breakdown cover and mobile phone insurance – to see if they were really worth the fee.
Based on the value and quality of each benefit included, Barclays’ Tech Pack finished last in the survey with a score of 20 per cent.
Customers pay an annual fee of £174 for the Tech Pack but Which? found the account could only save someone £16 a year as it offered no travel insurance or car breakdown cover.
However, it was lauded for offering comprehensive mobile phone and gadget cover worth around £190 a year.
The next worst of the bunch was the NatWest/RBS Reward Silver account which came in with a score of 46 per cent for providing no car breakdown cover and only limited travel and mobile phone insurance cover.
TSB’s Silver and Platinum accounts finished joint third from bottom with a score of 58 percent, after it announced both accounts will be raising monthly fees by up to £3 in September without any improvement to perks for customers.
Rated best value for money was the Nationwide Flexplus account with the top score of 87 per cent and saving customers £180 a year once fees are deducted if they use all the benefits.
Which? estimated the products in this account are worth more than £300 including worldwide travel insurance with winter sports covered as standard, as well as comprehensive car breakdown and mobile cover.
It is also £18 cheaper than the Barclays Tech Pack.
First Direct’s First Directory account finished in second place with the potential to save customers £156 a year after fees.
The package includes insurance cover worth more than £300.
Jenny Ross, Which? money editor, said: “Packaged accounts can offer a cheaper and more convenient way for people to get insurance, however our analysis shows that not all are created equal.
“Some offer lower quality cover and limited value for money.
“Customers should scrutinise the fees and benefits of packaged accounts before signing up – they’ll only save you money if you make use of the benefits.”
James Daley, consumer champion and managing director of Fairer Finance, said it is also important customers are confident they will make use of all the perks being offered.
He told Sun Money: “Packaged bank accounts are carefully designed to look like great value – but it’s often very difficult to make use of all the advertised features.
“Many of the insurances are inflexible, and can’t be amended – so if they don’t fit your needs exactly, then they’re not really worth the paper they’re written on.”
Sun Money has contacted Nationwide, First Direct, The Co-Operative Bank, Clydesdale Bank, Lloyds, TSB and Halifax for comment and we will update this story as more responses come through.
Barclays and NatWest defended their package accounts and said they offer comprehensive insurance covers.
Barclays said their account includes extensive offer for mobile protection and NatWest highlighted the savings benefits that are included with their such as cinema discounts.
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This week it was revealed how Nationwide is set to hike overdraft charges by up to £73 a year for millions of customers.
While there was better news for customers looking to borrow money as Tesco Bank slashed the rate of its loans for those borrowing £7,500 or more.
And if you’re travelling abroad, Barclays customers will soon be able to avoid overseas card fees by using its new “travel wallet” app.
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