More than 250,000 customers with Barclays fee-charging package accounts that come with insurance will see prices hiked by up to £138/year from today, unless they actively opt out.
Barclays is moving a number of those with its old package accounts to its free current accounts with fee-charging insurance "packs" added-on. Here's our Q&A on what's happening:
Here's who's effected by the move:
- Premier Life and Premier Life 25 customers: From today (6 November), those who earn an annual gross (pre-tax) income of £75,000 or above, which is paid in to their existing Barclays current account, or who have £100,000 or more of personal assets or savings with the bank, will be moved to its free Premier Current Account. Those who don't meet these criteria will be moved to the free Barclays Bank Account.
Regardless of which account you're moved to, three insurance packs will be added to your account automatically: Travel Plus Pack costing £13.50/month, Home Pack costing £6/month and Tech Pack costing £9.50/month. So monthly costs will jump from £17.50/month for Premier Life customers and from £25/month for Premier Life 25 customers to £29/month (£348/year) – a £48 or £138 annual increase.
(Premier Life & Premier Life 25 customers do however get a £6/month discount for the first year if they keep all three packs, and a £4/month discount thereafter, or a £2/month discount if they keep two of the three packs.)
- First Additions customers. From 15 December, you'll automatically be moved to the bank's free current account with Tech Pack costing £9.50month (£114/year) . So costs will jump from £6.50/month to £9.50/month – a £36/year hike.
Barclays says all existing current account information, including sort code, account number, any direct debits and standing orders, debit card and overdraft limit, will remain the same.
The provider adds it has no plans at present to move customers with any of its other package accounts to its new style accounts. A spokesperson says: "Whilst we're always assessing our products and services to ensure they're as simple and transparent as possible, there are no immediate plans for changes in the near future."
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How does the new cover compare?
Premier Life and Premier Life 25 customers
Premier Life and Premier Life 25 accounts were removed from sale for new customers in 2012, but existing customers could continue paying to use the added insurance. Here's how the existing cover compares to the new offering:
|Account||Premier Life (i)||Premier Life 25 (i)||Barclays current account + Travel Plus Pack, Home Pack and Tech Pack||Barclays premier current account + Travel Plus Pack, Home Pack and Tech Pack|
|Monthly charge||£17.50||£25||No fee for the accounts but insurance add-on costs £29 (ii)|
|Mobile phone cover||2 handsets||4 handsets||2 handsets for sole account, 4 for joint|
|Gadget cover||Up to £750||Up to £1,000||Up to £1,500|
|Travel insurance||Worldwide travel insurance||Worldwide travel insurance|
|Breakdown cover||RAC breakdown cover||RAC comprehensive breakdown cover|
|Extended warranty||Up to 5 years' cover, no limit to the number of items included||Cover for an additional 12 months for domestic appliances. TV, DVD and Blu-ray players, satellite equipment and remotes covered for breakdown or accidental damage.|
|Airport lounge access||Yes||Yes||Yes|
|Fee-free overdraft amount||£1,000||£0 (iii)||£1,000|
|Access to Premier Relationship Management Team||Yes||No, you'll have to speak to the regular branch team||Yes|
|24/7 Premier telephone banking||Yes||No, you'll have to use regular 24/7 telephone and online banking||Yes|
|Information correct as of 2 Nov 2015. (i) Removed from sale to new customers in 2012. (ii) Premier Life & Premier Life 25 customers get a £6/mth discount for the first year if they keep all three packs, and a £4/mth discount thereafter, or a £2/mth discount if they keep two of the three packs. (iii) If you keep an insurance add-on you can apply for an up to £200 overdraft.|
First Additions customers
Here's how the existing and new insurance cover compares for First Additions customers:
|Account||First Additions (i)||Current account + Tech Pack|
|Mobile phone cover||1 handset for sole account, 2 for joint||2 handsets for sole account, 4 for joint|
|Gadget cover||Up to £750||Up to £1,500|
|Fee-free overdraft amount||Up to £100||Up to £200|
|Card secure protection||Yes||No|
|24-hour tax and legal helpline||Yes||No|
|Information correct as of 2 Nov 2015. (i) Removed from sale to new customers in May 2008.|
Check now if the accounts are worth it
There is no option to keep the accounts you currently have, so use this change as an opportunity to calculate if the new level of cover is actually worth it, or if you can get cheaper protection elsewhere.
If you decide the new offerings are not for you, you have the following options, although Premier Life and Premier Life 25 customers need to do this by 30 November to avoid being charged the new fee, while First Additions customers need to do so by 30 December to avoid being hit with the new fee:
- Close your Barclays account and get a current account and insurance elsewhere. Calculate if you can save by switching to another package account provider, or to a free current account provider and getting standalone insurance cover separately. See our Best bank accounts, Bank accounts with benefits and Cheap mobile insurance guides for help getting the best buys.
- Ditch the add-on insurance but stay with Barclays. Remove the add-on insurance pack/s leaving you with a standard free Barclays or Barclays Premier current account. If you get all three insurance packs, you can remove one, two or all three if you want.
- Swap the add-on insurance and stay with Barclays. Keep the Barclays current account you're moved to, but swap the insurance pack/s with a different one. These range in price from £6/month to £13.50/month (see Barclays' website for full details).
Separately, if you were flogged your account by a pushy sales agent or were told it was right for you but actually you don't qualify for the benefits, because you're over a certain age for example, you could be owed serious cash, as banks have been found to have systemically mis-sold them. See our Reclaim Package Accounts guide for help reclaiming.
You need to activate insurance to be covered
Unlike most package bank accounts, which do it automatically, Barclays requires customers to activate its mobile phone, extended warranty and gadget cover or it's not valid. The same's true with its travel insurance, but only if you have a pre-existing condition.
This applies to everyone who has insurance tied to a Barclays current account, whether it's an old or new account. See our Bank with Barclays and pay for insurance cover MSE News story now to find out if you're affected, and how to activate your cover.