Santander customers are being advised to consider closing their accounts following the bank's decision to increase a monthly fee on several of its popular products.
The Details of the Santander Fee Increase
The high street bank has confirmed a price rise for customers holding its 1|2|3, Select, and Private current accounts. From 11 May 2026, the monthly management charge will jump by £1, moving from £4 to £5 per month. This change will affect thousands of loyal account holders across the UK, including in cities like Birmingham where the bank has a strong branch presence.
This adjustment means customers will pay £60 annually just to maintain the account, before any potential benefits are factored in. The announcement has sparked frustration among savers, with one commenting on the MoneySavingExpert forum that the bank appeared to be "skimming off the top." Another suggested the move could be a tactic to push customers towards Santander's alternative Edge Up account.
Expert Analysis: Is the Account Still Worth It?
Financial commentators have weighed in on whether the accounts remain good value after the hike. Andrew Hagger of MoneyComms noted that for many, the increased fee should still be covered by the accounts' cashback offers on household bills.
"On top of this the 2% interest on credit balances up to £20k will give you some net profit each month," Hagger explained. He provided examples: a £1,000 balance would earn £1.67 monthly interest, £2,500 would earn £4.16, and £10,000 would yield £16.67.
However, Rachel Springall from Moneyfacts conducted a detailed cashback calculation that painted a less rosy picture for some. Using typical bills, she estimated:
- £50 on TV/broadband: £1.50 cashback (3%)
- £150 on energy: £3 cashback (2%)
- £50 on water and £200 on council tax: £2.50 cashback
"However, as council tax is not collected every month, customers will take home less than £7," Springall stated. "According to the cashback calculator from Santander, that is half the overall monthly cap, and £5 of this is wiped off due to the new monthly fee."
Time to 'Ditch and Switch'?
The consensus among experts is that the fee increase should serve as a trigger for customers to review their banking arrangements. Rachel Springall was direct in her assessment, saying, "Now may be the perfect time for customers to ditch and switch."
Andrew Hagger pointed customers towards alternatives, highlighting that better returns are available elsewhere. "A good example of this is Spring Savings from Paragon Bank which still pays a best buy 4.11%," he said.
The message is clear: while the Santander accounts may still work for those with high balances who maximise all benefits, the £1 monthly fee hike is a prompt for every customer to scrutinise their statements and explore the competitive savings and current account market.
