Nationwide hikes FlexPlus packaged account fee by £60 a year – should you ditch and switch?

The building society's FlexPlus account has been one of our top-pick packaged bank accounts for years. As with other packaged accounts, it charges a monthly fee in exchange for various insurance benefits, offering travel and mobile phone insurance, plus breakdown cover.

Its fee hadn't increased since 2017 – but on Sunday 1 December it went up by £5 a month for both new and existing customers. The building society blamed the hike on the rising cost of insurance.

Consider if you really need a packaged bank account

If you've had the account for a while, your circumstances may have changed over time and you may find you're no longer getting the most out of the account.

So it's worth asking:

• Do you still need the insurance? Perhaps your phone isn't as flashy as it used to be and isn't worth covering, or maybe you're not going on as many holidays in far-flung places anymore. Or perhaps you need mobile insurance but not travel insurance, in which case you're unlikely to be getting your money's worth paying for both together.
  
  Also be mindful that if your personal circumstances have changed (particularly in relation to your health), this could affect the validity of your insurance. Check your policy carefully for any exclusions and declare any pre-existing medical conditions to ensure any travel insurance included is valid.

• If you do need it, could you get it cheaper separately? You might be able to get an offer on breakdown cover and travel insurance, which makes it more economical to buy these policies separately. Spend some time getting quotes for the cover you need to see if it works out cheaper than the packaged account's annual fee.
  
  We value Nationwide's FlexPlus insurance cover at around £500 a year, so even with the new pricing of £216 a year, it's a saving. BUT if the insurance you need will cost less than the FlexPlus fee, it's time to ditch.

If you decide you no longer need a packaged account, see our Best bank accounts guide for our top-pick current accounts without a monthly fee.

Next, see if a cheaper option would fit your needs

Best-buy packaged account providers charge between £11.50 and £19 a month, though the benefits and customer service offered vary.

For families, the closest competitor to Nationwide's FlexPlus is Virgin Money's Club M account. This costs a lower £12.50 a month but offers similar cover, including:

• Worldwide travel insurance, UK and Europe breakdown cover and mobile phone insurance.

• Plus, Club M also covers your family's gadgets, such as tablets and laptops (rather than just mobile phones).

Given the lower price (£66 less a year), if you've weighed up that you're getting full value from the insurance offered by a packaged bank account, it could be worth considering a switch from FlexPlus to Club M.

However, bear in mind that:

• Virgin Money has much worse customer service ratings. In our latest banking service poll, Nationwide got 87% 'great' votes, whereas Virgin Money's were only 37% 'great'. And in the official industry rankings for overall service quality, Nationwide was fifth out of 17, while Virgin Money was 16th.

• If you switch to Virgin Money you'll no longer be eligible for Nationwide's annual £100 'Fairer Share' payment. This has been paid for the past two years to Nationwide members who also have savings or a mortgage with it. Despite Nationwide's recent takeover of Virgin Money, Virgin Money customers won't get this payment.

Of course, given the move by Nationwide, there's also no guarantee Virgin Money will keep the Club M fee at its current level – though there's been no change since Nationwide's announcement in September.

For lots more options, including our top picks for couples, older travellers and more, see our Top packaged accounts guide.