uSwitch comments on Lloyds’ decision to increase fee

Financial comparison website uSwitch.com has issued a comment on Lloyds TSB’s decision to increase the monthly fee on its premier banking account from £15 to £25.

Nick White, head of personal finance at uSwitch, said that the 70 per cent hike is “likely to get a frosty reception” from the bank’s more affluent customers.

The monthly increase will amount to an extra £120 a year for Lloyds TSB customers, an amount which Mr White describes as “excessive”, particularly as the bank’s justification for the rise is ID theft protection and home emergency cover.

Mr White continued: “To add to the bad news, Lloyds has also removed the option for new customers to avoid the monthly fee by keeping a credit monthly balance in excess of £5,000 in the account.

“Existing customers will still be able to benefit from this but they will have to increase their in-credit balance by 50 per cent to £7,500.”

While he pointed out that the account does offer some comprehensive benefits, such as a personal manager, worldwide travel insurance and breakdown cover, Mr White said that many customers are already likely to own these services and “must make sure they are not doubling up”.

When the new monthly fee is applied, Lloyds TSB stands to make an additional £1 million January alone, uSwitch reports, and this does not include the extra profit the bank will receive by no longer waiving the monthly fee for new customers.