Last updated 05:28, Friday, 16 May 2008

Two of the UK’s biggest banks have increased current account charges for some of their customers. The Royal Bank of Scotland Group, which includes NatWest, and Lloyds TSB have hiked rates for people with certain packaged accounts.

More to pay: Packaged accounts are current accounts that include a range of extra services such as free breakdown cover and travel insurance

But the groups denied the move had anything to do with their recent loss of a High Court test case over unauthorised overdraft charges, saying instead that the rates had simply not been increased for a number of years.

Packaged accounts are current accounts that charge a monthly fee but include a range of additional services such as free travel insurance and free breakdown cover.

Lloyds raised the charge for its Gold and Platinum accounts by £2 a month to £12 and £17 respectively from the beginning of this month.

The group, which has around four million customers with packaged accounts, said the charge for the accounts had not changed for three or four years.

It added that in response to customer feedback, it had also improved the benefits people got from the accounts.

A Lloyds TSB spokesman said: “The process of improving the benefits on our added-value accounts is part and parcel of offering a packaged account where we always look to enhance the range and quality of benefits.

“With the inclusion of these new benefits it has been necessary to increase the cost of some of these accounts, but there has been no movement in price for three or four years prior to this. The benefits in total are worth up to £670.”

Royal Bank of Scotland is increasing the fee for its RBS Royalties Gold and NatWest Advantage accounts by 95p to £12.95p a month.

It said this was the first increase for its Advantage Gold account in two years and the first for its Royalties Gold account for three years.

It added that the extra £11.40 that consumers would pay each year was more than offset by its new breakdown cover, which was worth £69.

An RBS spokesman said: “In response to customer feedback we have enhanced our packaged accounts.

“The packaged accounts now offer our best-ever potential savings for customers with the addition of these new features, this has been reflected in modest price rises.”

Last month the major banks lost a High Court test case over whether unauthorised overdrafts were subject to regulation by the Office of Fair Trading.

The ruling paves the way for a further hearing in which the court will decide whether the charges are unfair and, if so, what a fair charge should be.

Banks are thought to make between £2 billion and £3.5 billion a year in fees charged when customers go into unauthorised overdraft, with the charges as high as £35 for a single bounced payment.

It has been warned that changes to these charges could lead to the end of free banking in the UK, with commentators warning that banks would look for other ways to claw back the lost revenue.