Packaged current accounts criticised

19 January 2006
Packaged current accounts could prove more costly than they are worth, according to a new report.

These accounts have been popular in the past, offering a number of linked benefits and services, but research by Abbey shows that account holders are paying unnecessary fees.

Abbey's study showed that more than a fifth of people pay a fee for extra services, but that just one in a hundred actually makes use of them.

It said that there have been developments in the market, which now allow people to earn healthy returns on their positive balances and be charged low rates of interest on overdrafts without needing to pay.

The value of charging account holders around £150 each year for services that they never use, such as will-writing, has been called into question.

"Many of the services being packaged as benefits in the Lloyds TSB Gold Service and Barclays Additions Plus account are not used by customers," said Sue Hayes, Abbey's director of product development.

"Why pay a monthly fee for an account paying a paltry rate of interest unless you are really sure to benefit financially from the extras?"

To read more about Current Accounts, click here.

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