Nationwide Building Society fee hike sees customers charged £50 more per year to access cash in bank account

The fee hike affects one of Nationwide's most popular current accounts, which comes with a range of additional perks for customers.

The move comes as the building society recently reported a sharp drop in profits, with statutory pre-tax profit falling to £568million for the six months to September, down from £989m a year ago.

The FlexPlus account offers customers a comprehensive package of benefits, including worldwide travel insurance for family members on trips up to 31 days.

Account holders receive phone insurance covering loss, theft, damage and faults, provided by Assurant, which extends to partners and dependent children.

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The package includes AA breakdown cover for any eligible vehicle, whether owned by the account holder or while travelling as a passenger.

Additional perks include fee-free spending abroad, with no charges for using debit cards in non-sterling transactions.

Customers can also upgrade their travel insurance for additional holiday coverage through Aviva Insurance Limited. A Nationwide spokesperson said that rising insurance costs were behind the fee increase.

The building society maintains that customers are still offered a "competitive" deal based on price and quality of insurance cover.

"Even after this change, FlexPlus will continue to be one of the UK's most competitive packaged current accounts, both in price and quality of cover," Nationwide said.

The fee adjustment comes as Nationwide recently acquired Virgin Money in a major banking merger, with chief executive Debbie Crosbie emphasising that future profits would benefit customers rather than external shareholders.

According to Money Saving Expert's analysis, Nationwide's main competitor is Virgin Money's Club M account, which offers similar benefits at a lower cost.

The Club M account provides worldwide travel insurance, UK and Europe breakdown cover, and mobile phone insurance for £12.50 monthly.

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MSE advises customers to carefully evaluate whether they need a packaged current account at all. The experts suggest reassessing insurance needs, particularly if phones are less valuable or travel is infrequent.

They recommend comparing standalone policies for essential coverage like breakdown and travel insurance against the account's annual fee.

Nationwide customers can also benefit from a £175 switching bonus when moving to the FlexPlus account. The account is available to UK residents aged 18 or over for personal use only.

Customers are limited to holding no more than four existing sole or joint Nationwide current accounts. The changes come as Nationwide reported customer deposit balances grew by £8.3billion during the latest half-year period.

The building society has also pledged not to close any branches in towns or cities where it currently operates until at least 2028, maintaining its commitment to physical banking services.