Nationwide is increasing monthly fees on its FlexPlus current account by 38% to £18. Should you throw this away now?

Nationwide Building Society has increased the monthly amount on its FlexPlus current account by £5 per month.

From this month, customers will pay £18 per month, up from £13 per month, which represents a 38 per cent increase.

It means that over the course of a year, customers will pay £216 in fees to maintain the current account, up from £156 – a jump of £60 per year.

Nationwide said the monthly rate increase was due to “increasing insurance costs.” All customers were notified that the rate would increase in September.

In return for the monthly fee, customers receive family travel insurance, family phone insurance, car breakdown cover, free spending abroad, exclusive savings rates and a £50 interest allowance.

We look at whether the benefits of the Nationwide FlexPlus account are worth the higher monthly fee of £18.

What does the FlexPlus account offer?

Travel insurance

The FlexPlus account comes with global multi-trip travel insurance through Aviva.

It covers families for trips up to 31 days and includes cover for winter sports and travel disruptions. It covers all FlexPlus current account holders, their partners and their children.

On its own, a plan like this with Aviva would cost around £300 or £460 through another provider, according to price comparison website Compare the Market.

If you had several trips planned in a year, the travel insurance benefit alone through the FlexPlus account would make the £216 cost worth it.

Andrew Hagger, founder of website MoneyComms said: ‘The global multi-trip travel insurance – from Aviva – provides good cover.

‘My wife and I had to make a claim on this earlier this year and it was excellent service. We had the refund in our account within five days of submitting the claim.”

Phone insurance

The FlexPlus checking account also comes with global family cell phone insurance from Assurant.

It covers phone accessories, unauthorized network charges (if someone else uses your phone without your permission) and cover for expensive phones up to £2,000.

You can submit a maximum of four claims per FlexPlus account per twelve-month period. When you make a claim, deductibles between €30 and €100 will apply.

Car breakdown cover

The FlexPlus account comes with vehicle coverage for every eligible vehicle you travel in (personal coverage) plus any vehicles you own (vehicle coverage), even if someone else is driving. It applies within Great Britain and Europe. Coverage is provided by AA.

You do not have to pay a deductible when submitting your claim.

Annual vehicle cover costs around £90, while personal cover for one vehicle costs £112 if you buy it directly through AA.

Hagger added: ‘AA’s fully comprehensive car breakdown (including European cover) covers you and your family members for every car you travel in.’

Exclusive savings rates

The best savings rates offered through Nationwide’s FlexPlus account are for a regular saver, which pays up to 6.5 per cent on deposits up to £200 per month, and an easy access account, which pays 3.25 per cent.

Although it offers a flashy headline interest rate, the regular savings account has some disadvantages.

Customers can only make three free withdrawals within a twelve-month period. With a fourth withdrawal, the rate drops to 2.15 percent.

Savers will find a better deal in First Direct’s regular saver, which offers 7 percent on deposits up to £300 per month.

Customers can find easy-access deals that currently pay as much as 4.85 percent, so the FlexPlus easy-access account that pays 3.25 percent isn’t one of the key benefits of the FlexPlus account.

Free account customers also have access to these loyalty rates.

Hagger said: “The FlexPlus price increase is a bit steep, but hasn’t been increased in a while.

‘The coverage you get through the account is very extensive. Even at £216 a year I still think this account is excellent value for money.”

A spokesperson for Nationwide said: ‘We have been reluctant to increase the allowance for FlexPlus since 2017. However, rising insurance costs mean that we now have to make changes, which will take effect from December.

‘Even after this change, which customers were informed of in September, FlexPlus will remain one of Britain’s most competitive package current accounts, both in terms of price and quality of cover.

‘Nationwide continues to reward current account customers with access to exclusive products such as Flex Regular Saver, which pays 6.5 per cent, and earlier this year returned £385 million to eligible members through a £100 Fairer Share payment.’