moneysupermarket.com: A&L restructuring of current account

Commenting on Alliance & Leicester restructuring the terms of its current accounts from October 22, Kevin Mountford, head of current accounts at price comparison site moneysupermarket.com, said: “We are seeing some real innovation in the current account market, and Alliance & Leicester’s new deal definitely qualifies as innovative. A& L’s reason d’etre here is to simplify current account fees, making them more transparent. It has met these objectives by abolishing complicated AERs and replacing them with a flat fee for those who use their overdrafts. People who use an overdraft often don’t pay much attention to the AER or can’t work out how it’s calculated, so I’m glad to see someone bringing a level of clarity to the market.

“With everything though, the devil is in the detail and customers should ask themselves whether the new simplified fee structure does actually save them money in the long-term. According to our analysis1, the new way of charging will result in A& L customers being marginally better off, but it is still a long way behind HSBC in terms of value for money. I applaud any developments in the current account market that benefit consumers, but it would have been good to see A& L challenge HSBC’s dominance in this area and introduce even lower fees.”