uSwitch.com: Alliance & Leicester's Premier 50 account

Mike Naylor, personal finance expert at uSwitch.com, the independent online price comparison and switching service, comments on the launch of Alliance & Leicester’s Premier 50 account: “Following the recent changes to its Premier and Premier Direct current accounts, Alliance & Leicester (A& L) has announced the launch of a new Premier current account, aimed specifically at the over 50’s market. The account is open to new and existing customers and includes benefits ‘designed to appeal to the over 50’s’ - including worldwide travel insurance and medical benefits, for a £10 monthly fee. However, customers need to make sure they read the small print carefully, otherwise what could seem like a good deal with a 0% overdraft facility for life, could in fact cost them up to an additional £60 a year, as the charge period only applies for the first 12 months.”

Naylor continues: “As with most of A& L’s accounts, the Premier 50 account offers an attractive in-credit interest rate (7% AER), the highest rate available for a packaged account on the market. However, this ‘silver’ rate has a cloudy lining. It expires in January 2009 and then tracks the Bank of England base rate minus 1%.

“Alliance & Leicester’s boast of a 0% overdraft for life is also too good to be true, as the same charging structure that has been applied to the Premier and Premier Direct accounts. This stipulates that authorised overdraft usage could cost customers up to £5 a month, or £60 a year. This is equivalent to an overdraft interest rate of 6.15% EAR. However all things considered, given that the average authorised overdraft rate is 12% EAR, this is still a pretty good deal.

“As many older people struggle to find competitive travel insurance deals, the annual worldwide policy (which caters for people up to the age of 79) is a worthwhile benefit and one of its best features. However, it is important to remember that, as with all travel insurance policies, pre-existing and previous medical conditions need to be declared and may not be covered or could lead to an additional premium.

“For those customers who do not require worldwide travel cover, the £120 a year fee may be an unnecessary expense. European travel cover is available with Alliance & Leicester’s fee-free Premier Account, although this account pays just 1.5% AER on credit balances and only covers travellers up to the age of 65. Another point to consider with the Premier 50’s travel insurance policy, is that globetrotting over 50’s who spend more than 31 days out of the country per trip will have to pay an additional premium.

“As with all packaged accounts, they are only good value for money if you need all the benefits – there is no point paying for something that you are not going to use or already have. We would encourage consumers to read the small print on this account and examine the benefits carefully. For those who feel that they will not make the most of the benefits offered by Premier 50, there are several fee-free current accounts that will pay a similar rate both with Alliance & Leicester and other providers. As always, customers should shop around to find the best deal for them.”