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

Nationwide's FlexPlus has been one of our top-pick packaged bank accounts for years, offering travel and mobile phone insurance plus breakdown cover for a £13 monthly fee.

The fee hasn't increased since 2017 – but, from 1 December 2024, it will rise by £5 a month (£60 a year) for both new and existing customers. The building society blamed the hike on the rising cost of insurance.

Nationwide FlexPlus is likely worth sticking with for now

If you got FlexPlus for its combination of insurances, it remains hard to beat at its current cost of £13 a month.

The main competitor is Virgin Money's Club M account, which offers similar cover – including worldwide travel insurance, UK and Europe breakdown cover and mobile phone insurance – for £12.50 a month.

As well as it being cheaper, the other key advantage of Club M is that it covers your family's gadgets, such as tablets and laptops (rather than just mobile phones).

However, given the move from Nationwide, there's no guarantee Virgin will keep the Club M fee at its current level, so you may want to wait and see what happens before switching away from the account.

Club M also has some other downsides to consider:

• Virgin Money has much worse customer service ratings. For example, in our latest poll, Nationwide got 87% 'great' votes, whereas Virgin'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.

• You won't qualify 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 upcoming takeover of Virgin Money, Virgin customers won't be eligible for the payment if it happens again.

If you decide to stick with FlexPlus for the time being, it's worth remembering to check the alternatives when the new fee comes into effect in December.

Do you really need a packaged bank account?

The upcoming price rise is a good opportunity to think about whether you need a packaged bank account at all. This is especially true if you've been paying for it for a while, as your circumstances may have changed over time and you may find you're no longer getting the most out of the account.

Consider the following:

• 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.

• 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.

See our Best current accounts guide for our top-pick current accounts without a monthly fee.