Millions of people paying for bank accounts with attractive extras like travel insurance and streaming subscriptions might be facing higher costs now due to increased fees.

These packaged accounts typically charge monthly fees ranging from £10 to £40, offering perks that can save hundreds of pounds annually if utilized effectively.

However, recent data from Fairer Finance highlights that some fees have surged by as much as 16% over the past two months. NatWest and Royal Bank of Scotland (RBS), for example, raised the monthly fee for their Premier Reward Black accounts from £31 to £36 in June, pushing the annual cost from £372 to £432. These accounts provide worldwide travel and phone insurance, European breakdown cover, fee-free foreign spending, a concierge service for bookings, and access to over 1,000 airport lounges.

Additionally, these accounts offer £10 monthly cashback if you have two direct debits and log into your app. These services are available to NatWest or RBS premier customers, who must have either £100,000 in income, savings, or investments, or a £500,000 mortgage.

At the start of July, Lloyds Banking Group also increased fees for its packaged accounts under Lloyds, Halifax, and Bank of Scotland. For instance, the Silver, Club Lloyds Silver, and Silver Vantage accounts, offering European travel insurance, UK breakdown cover, and phone insurance, saw fees rise from £10 to £11.50 per month (£138 annually).

Halifax’s Ultimate Reward account, which includes worldwide travel insurance, UK breakdown cover, phone and home emergency cover, fee-free foreign spending, and a choice of monthly rewards such as £5 cashback, cinema tickets, or magazines, has gone up by £2 per month to £19 (£228 annually).

Lloyds introduced fee-free foreign spending for some of its packaged accounts. Both Lloyds and NatWest cited rising costs in providing benefits such as insurance and airport lounge access.

James Daley from Fairer Finance remarked, “Packaged bank accounts can offer great value if you use all the benefits. But they can also be a colossal waste of money if you don’t.”

He also noted that recent price hikes might reduce the value for customers not fully utilizing the perks.

According to the Financial Conduct Authority (FCA), there were 12.7 million packaged bank accounts in 2020, and 26% of people surveyed in 2022 had a fee-paying account. Among them, 13% felt they weren’t getting good value for their money.

Since 2013, regulations require banks to send annual statements detailing what’s included in these accounts. This measure followed complaints that customers were sold packaged accounts despite not qualifying for certain insurance perks.

Daley added that the FCA’s consumer duty rules obligate banks to ensure their customers are utilizing the services for which they are paying.

“It’s no longer acceptable for banks to sit back and let their customers get poor value from these accounts,” he said, urging banks to consider downgrading customers to cheaper, lower-frills alternatives if benefits go unused.

If you primarily use travel insurance or phone cover included with your account, it might be more cost-effective to purchase individual policies instead of paying the approximate £140 for a packaged account.

According to GoCompare, insuring the latest iPhone 15 with 128GB storage averages £72 per year. A worldwide travel insurance policy costs around £112 annually, and breakdown cover averages £34.

Check whether you need these extra policies. Sam Richardson from Which? noted, “You might already be getting these benefits through other means, like home insurance covering mobile phones and gadgets, or car insurance including breakdown cover as standard.”

If travel insurance is a key perk, scrutinize the policy details to ensure coverage for specific needs, such as pre-existing medical conditions or ski trips.

Be mindful of age limits: Lloyds’ Silver account doesn’t cover those over 65, while NatWest’s packaged accounts exclude those over 70 unless an additional £75 yearly fee is paid.