Santander raises fees and overdraft rates for key accounts

According to Santander, the monthly fee for its 1|2|3, Select, and Private current accounts will rise from £4 to £5 starting May 11. Additionally, Santander Select and Private customers will see the annual percentage rate (APR) on overdrafts over £500 increase from 27.06% to 28.33%, a variable rate. The exact number of customers impacted by these adjustments has not been disclosed, and Santander has not provided specific reasons for the increases, leaving it unclear if any exceptions or waivers apply to certain groups.

The Santander 1|2|3 Current Account, which closed to new customers in 2023 but remains held by many existing users, offers features such as 2% AER (variable) interest on balances up to £20,000. It also provides cashback on household bills, including up to 3% on water bills, 2% on gas and electricity, and 1% on council tax and similar payments. However, there is a monthly cap on cashback earnings, though the exact limit is unspecified, which can restrict total benefits even for customers with higher bills.

Financial experts have commented on the changes. According to Daily Express - Finance, Andrew Hagger described that the £1 monthly fee increase should still be covered by cashback on bills for most people. Meanwhile, Rachel Springall, also cited by Daily Express - Finance, described loyal customers as likely feeling disappointed over the increase. She further described it as vital for users to keep on top of their outgoings and calculate if the account remains worthwhile, given that cashback earnings vary with household spending. Springall also described now as an ideal time for customers to consider switching accounts. How these fee adjustments compare to changes in other UK banks' current account charges remains unknown.