Banking

Are VIP bank accounts worth it… or does the cost outweigh the perks?

Marketed as an elite club for those on higher incomes, Britain’s high street banks claim their premier bank accounts offer middle class customers one-to-one support and exclusive access to special benefits.

But some customers say their ‘personal’ banking assistant has actually got thousands of clients, while others complain special rates offered to premium customers are easily beaten elsewhere.

Yet dissatisfaction with standard current accounts is rising, with nearly 24,000 of us complaining about them to the Financial Ombudsman last year.

The personal touch: Unlike private banking for the very wealthy with six-figure sums, premier banking is aimed at customers without a millionaire’s bank balance who want a special service

So, could it still be worth switching to premier banking if you can — or is it just a ploy to cross-sell you other financial products?

Not just for super rich 

Unlike private banking for the very wealthy with six-figure sums, premier banking is aimed at customers without a millionaire’s bank balance who want a special service.

NatWest — which says its premium services are used by the top 2 per cent of customers — accepts couples who earn from £60,000 each paid into the same joint account, or a single earner on £100,000.

HSBC accepts clients with a minimum of £50,000 saved with the bank or who have an income of at least £75,000 and a mortgage, investment or life insurance product with the bank.

Barclays allows customers with a minimum income of £75,000 or £100,000 saved, while Lloyds wants its premier customers to earn £100,000 or to invest or save £100,000.

Signing up to premier banking is usually free, although you can pay extra for additional benefits.

For example, NatWest and Royal Bank of Scotland’s basic premium account is free — but, for £2 per month, customers can access up to £10 a month of cash rewards. Or, for £31 per month, they can get the Premier Reward Black account.

It offers inclusive benefits such as travel insurance, breakdown cover, airport lounge access and a concierge service, which will do things like buy tickets for events on your behalf.

And while Barclays’ premier bank account is free, you have to pay £12 a month to be part of its Avios air miles reward scheme.

High Street banks claim their premier bank accounts offer middle class customers one-to-one support and exclusive access to special benefits

High Street banks claim their premier bank accounts offer middle class customers one-to-one support and exclusive access to special benefits

The premier account you choose should depend on how much you can benefit from any deals.

For example, HSBC’s premier account is aimed at families and its inclusive worldwide travel insurance covers the main account holder, their partner, children and grandchildren. Its preferential mortgage rates are also available to the whole family.

But Lloyds’ international premier account is specifically aimed at people who want to work or retire overseas. It offers access to a current account in pounds, euros and U.S. dollars, free international transfers and preferential rates for a consultation with international tax advisers.

If you are eligible for a premium account you can apply online — but some are automatically offered one if they meet the criteria.

What perks are included? 

Premier customers typically get a special debit card — Barclays and HSBC offer a black one — and you may get benefits included for free, depending on the bank.

These could include an interest-free £500 overdraft, free international money transfers, travel insurance or access to special rates on savings, loans, credit cards and mortgages.

Be aware that insurance included with premium accounts is often not a ‘top of the range’ policy and problems can arise when you come to claim, says Martyn James of complaints service Resolver.

Issues can include insurance excluding customers who are over 70 years old, only being valid for trips of a certain length or not providing cover for Covid-related issues — all terms which can be hidden in the small print.

Perks: Free benefits of premier banking can include travel insurance, breakdown cover and airport lounge access

Perks: Free benefits of premier banking can include travel insurance, breakdown cover and airport lounge access

Mr James also warns that the ‘exclusive’ deals on offer might not be as ‘premium’ as they first appear. ‘In recent years, a number of banks have withdrawn or reduced the interest or special deals associated with their premium accounts — and other introductory offers have been withdrawn too,’ he says.

‘So even if a premium account is beneficial at first, it’s vital to keep an eye on any notifications of a reduction in their value.’

Barclays, for example, offers its premier banking customers an exclusive savings rate of 0.25 per cent on its one-year cash Isa (with three annual withdrawals allowed) and HSBC offers 0.2 per cent on its Loyalty Cash Isa.

But online bank Marcus offers twice as much interest, at 0.5 per cent for a flexible Isa with unlimited withdrawals, while Shawbrook Bank pays 0.75 per cent for a one-year fixed Isa.

The personal touch? 

Customers are promised a greater level of customer service support with premier banking than with a regular account.

You will be allocated a named representative — or ‘relationship manager’ — to help you with your banking, who is supposed to get to know you and your needs in the same way that traditional bank managers used to do.

But some premier customers say they aren’t receiving the one-on-one service they expected.

Take financial think-tank director Andrew Hilton, 74, who was offered free premium banking because he held a large amount of money in his Royal Bank of Scotland (RBS) account.

‘At first it was flattering and I felt I was getting an extra service,’ he explains. ‘It was nice to think I had a banker and there was someone I could call.’

But when Andrew, who is based in London, recently had a simple query about his bank card, his personal representative told him she couldn’t help and he should call the generic customer service department instead.

A few weeks later, the same representative insisted they have a video call, where she pushily tried to encourage him to switch his savings account to one which didn’t suit his needs.

When he asked why she could do a sales call but couldn’t help him with his questions, she told him she had 2,600 clients so couldn’t help with personal inquiries.

‘I immediately thought, “So much for premium banking”,’ he says. ‘I realised I’m just one of thousands on a list that she is working through, trying to sell a product.’

RBS says: ‘We take pride in the personal service our premier banking customers receive.’

So would premier banking work for you? If you can benefit from the perks it may be worth it, but read the small print, especially if you’re paying for your account, or you may find you get little more than a shiny debit card.

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