Abbey launches new bank accounts with lifestyle benefits

Abbey is launching two new accounts designed to offer added value to families and people who like to travel frequently. The accounts, which cost £15 a month, are Abbey's first entry into the 'added value account' (also know as "packaged accounts") market.

Abbey's two accounts are designed to counter a criticism often levelled at added value accounts - that while the benefits on offer can add up to a high headline value, they are not relevant, so the customer only ends up using a fraction of them.

Abbey's accounts, by contrast, are targeted to suit two specific segments of society - people with children and people who travel - to ensure that customers can get the most value out of their account.

The Travel Reward Bank Account includes benefits worth £839.13, including worldwide multi-trip travel insurance worth £150, holiday discounts and hotel offers worth up to £500 and annual airport lounge access worth £137, as well as some basics you'd expect from an added value account including highly competitive interest and overdraft rates.

The Family Reward Bank Account includes benefits worth £844.99, including holiday discounts and family hotel / leisure offers, gadget insurance, mobile phone insurance and legal advice services, among others.

Steve Shore, Director of Abbey Banking, commented: "Added value accounts can be great value - but only when customers actually use the benefits. It's no use having a high headline amount if a customer only uses a fraction of that. Our accounts have been designed so that the benefits are relevant to the needs and lifestyles of our customers and they can maximise the value they get from their account."

In addition, unlike many added value accounts, Abbey's relationship with its suppliers has been set up in a way that encourages use of the benefits. Some banks only pay for the benefits if customers use them - which mean the banks pay less to their suppliers if people don't use all the benefits. However, Abbey's relationship with its suppliers is based on a set amount, no matter how much people use their benefits.

Steve Shore continued: "People are paying £180 a year for these accounts yet there are over £850 worth of relevant benefits on offer - so it's a great deal if people use them. That's why we have designed the accounts and the supplier contracts in the way we have - to ensure our customers get the most from their accounts."

The accounts are exclusively available online to Abbey e-banking customers by going to abbey.com from Wednesday 29 October onwards. They are not available in branch or over the telephone.

Andrew Hagger, Moneynet.co.uk commented: "The packaged current account and the way it has been sold has quite rightly come in for some criticism in the past. However, the decision to launch this product solely online to avoid any ‘hard sell' and the fact that Abbey are giving the customer the option to choose a package that will allow them to obtain good value for their £15 monthly fee are both positive steps. The usual caveat applies, in that these accounts are only worth a look if you use the benefits, but the ability to self-select in front of your own PC or laptop should mean far fewer customers fail to receive value for money."

Michelle Slade, Moneyfacts commented: "Nobody likes paying for something they never use. Historically, packaged current accounts have been given a bad press as consumers end up paying for an account with benefits that don't suit their needs.

"Abbey has recognised this fact and instead launched into the market with an account tailored to give their customers benefits which they can really make use of. By selecting a package that is right for them, consumers shouldn't be left feeling they are paying money for nothing."