Virgin Money’s new current account customers will be subject to £60 in charges on an annual basis in the wake of Sir Richard Branson’s purchase of Northern Rock’s branches and portfolio.
Critics of the new High Street personal and business bank account provider have leveled accusations at Sir Richard of channeling Arthur Daley in his quest for larger and larger piles of cash by charging a monthly £5 fee to every new current account holder regardless of whether they stay in the black or not. Moreover, many have expressed the fear that Virgin Money’s rivals will follow in the new retail bank’s footsteps and do away with free accounts; out of the approximately 54 million such current accounts in the UK, around 80 per cent are free.
Current accounts that carry monthly fees usually offer something in return to their customers such as mobile phone or travel insurance, but consumer campaigners say that the majority of Brits would prefer to purchase the cover separately if it meant avoiding the extra banking fees. The possible discounts Virgin Money may provide to its customers include gym memberships, internet and TV subscriptions, and Virgin flights, yet these discounts are yet to be finalised.
The charges, Virgin Money said, would go towards a fairer distribution across all their customers, and would result in lower fees for related services. Jayne-Anne Gadhia, chief executive for Virgin Money, said that the majority of consumers in the UK would roll their eyes at the idea of ‘free’ banking, as banks and building societies charge overdraft fees and other hidden fees to cover the cost of free current accounts.