Why I ditched my packaged account

16 January 2014

I’ve had a NatWest Advantage Gold account for the past four years. Mostly, it served me well but having reviewed my finances at the end of 2013, I decided it was time to call it a day.

The account cost me £11 a month and in exchange I got an authorised overdraft of £100, plus the usual packaged account benefits – travel insurance, mobile phone insurance, car breakdown cover and a few others I struggle to name.

I was using the Advantage Gold account as a joint account and every month it was where my husband and I transferred our contributions towards the household bills.

Once a month, our pounds and pennies were taken away by our landlord and, later, our mortgage lender – not to mention energy supplier. The small overdraft came in handy every now and again; if we’d accidentally spent a few pounds more than we should have at the supermarket, for example.

And we made regular use of some of the extras too. The mobile phone insurance gave us great peace of mind as we’re both fans of expensive iPhones, and it was great to go on holiday without having to think about sorting out travel insurance.

However, last year marked somewhat of a watershed in our finances. We became homeowners and we paid for our wedding – I’m still trying to get over the cost of chair covers and what wedding venues charge for Schloer!

So when it came to combing through our outgoings in 2013 to work out what we were spending and what we were spending it on, the £132 on the packaged account didn’t seem to be particularly necessary. We’d never made a claim on the mobile cover, never needed the breakdown cover and so the only thing we used was the travel insurance and, when we looked into it, we would have been better off buying it separately.

Packaged accounts in general have had a pretty poor time of it in the press in recent years. Many have been criticised on the basis that some of the extras customers were paying for, such as the travel insurance, were unsuitable for their needs and they were unable to use them. For example, the elderly were often excluded from travel insurance but weren’t made aware of that before signing up for the account.

The Financial Conduct Authority went as far as to say that in some instances, packaged accounts had been intentionally mis-sold. And back in March last year it introduced new rules to prevent abuse. It told the banks they had to check that customers were indeed able to claim on the insurance policies included in accounts before selling them.

While I quite agree that packaged accounts aren’t suitable for everyone, mine worked quite well for me – for a couple of years anyway. But in the end, it just worked out too expensive. And that’s why I closed the account.