Subscription pricing is back on UK banks’ agendas, offering a renewed opportunity to build fee-based propositions customers genuinely value. With subscription-savvy customers, always-on engagement, and modular tech, banks can design lifestyle-led, compliant packages that deliver fair value. Here’s how you can get it right.
Packaged bank accounts (those offering bundled benefits like insurance, travel perks, or discounts for a monthly fee) were once a big part of UK retail banking. Back in 2009, one in five UK customers had one, and by 2011, monthly account fees made up around 14% of net current account revenues. Retail banks had stable subscription revenue streams long before subscriptions became the norm in consumer-tech.
But that was then.
Later, packaged accounts became subject to stricter regulation. The Financial Conduct Authority (FCA) raised concerns about banks bundling multiple products, especially insurance, that weren’t always suitable for all customers. In 2013, the FCA went a step further, requiring banks to formally assess and record whether customers were eligible to claim on any insurance policies included in a package.
From that point on, packaged accounts became less appealing to banks. The risks of getting it wrong, paired with the complexity of compliance, led to fewer offerings and a shrinking role in bank revenues.
Historically, before mobile banking became the norm, there were fewer touchpoints to sell these products. They were typically pitched during in-person branch visits or when taking out a loan: rare moments in a customer’s life. The relationship was transactional, infrequent, and relatively ad hoc.
Fast forward to today, always-on customer engagement means there’s far more opportunity to deliver and promote relevant, valuable services in real time. That opens the door for a reimagined form of subscription banking.
Why revisit subscription banking?
There are four good reasons why subscription pricing for current accounts deserves another look today.
Subscription revenues are highly valued
While interest income is subject to central bank policy and interchange is at risk of regulatory intervention, opt-in subscription income streams are perceived by investors to be more reliable and of high quality. As such, they are more highly valued. Shifting the revenue mix to recurring subscription income can enhance the enterprise value of the bank.
It’s a great way to deepen customer relationships
The better you meet a customer’s needs, and the more you support their wider life, the harder it becomes to separate. The evidence is compelling and universal. When a customer has more products and services with a bank, they are less likely to leave and more likely to repurchase.
Consumer preferences have shifted
People, especially younger customers, are more comfortable with subscriptions than ever. From Spotify to Deliveroo, the average UK consumer now pays for at least three monthly services, with some spending up to £300 per month. And it’s not just about convenience, it’s about lifestyle. Customers want flexibility, relevance, and even a bit of fun. Generic packages filled with insurance won’t cut it anymore.
Technology makes it possible
Unlike a decade ago, banks today can build and launch new products faster and at lower cost. Cloud-based platforms and modular product layers mean packages can now be tested, personalized, and iterated with agility. Want to add concert perks or swap out an underused benefit? You can. This tech stack gives banks the flexibility to deliver modern, engaging subscription services.
The regulatory bar is higher; but that’s a good thing
Yes, the FCA’s expectations are stricter than they were in the 2000s, and the introduction of the Consumer Duty raises the bar even further. Banks must prove that their products provide fair value. Customers shouldn’t pay for services they don’t understand, don’t need, or can’t use.
This isn’t a dealbreaker - it’s an opportunity. If banks take these rules seriously, they can build trust and offer packages that genuinely deliver value.
The current landscape: No clear winners yet
So, if subscription banking deserves another look, what does the market actually look like today? In short, it is active, evolving, and full of experimentation, but there is still no model that has truly won. Packaged accounts continue to exist, and digital players have pushed into lifestyle territory, but most propositions still rely on fixed bundles that limit customer choice. Compared with other subscription categories, the offer in UK banking feels early and incomplete.
Still, there are some promising signs of where the future might go. Several banks have started to introduce elements of flexibility, relevance, and lifestyle value that move beyond traditional insurance-heavy packages.
Lloyds Bank is one example. Within selected tiers, it offers a Lifestyle Benefit that gives customers a real choice between perks such as a streaming subscription, cinema tickets, dining rewards, or a magazine. It is only one choice within an otherwise fixed account, but it shows a shift toward meeting customers where they are rather than assuming everyone wants the same set of benefits.
Some banks are also experimenting with wellbeing focused benefits. The Santander Edge Explorer account includes 24-hour remote GP access for the account holder and their family, while Lloyds Bank offers access to Bupa digital health services within its Premier tier. These additions signal that health and wellbeing are becoming increasingly relevant components of subscription propositions and that banks are looking to support wider aspects of everyday life.
Digital players bring yet another flavor. Revolut has been expanding the lifestyle component of its Plus, Premium, Metal, and Ultra plans by adding partner services such as fitness and wellbeing apps, digital content and other day-to-day value features. These sit alongside travel, wealth, payments, and insurance elements, and help create a more rounded subscription experience that feels closer to what consumers expect from modern subscription brands.
These examples point to a gradual shift. Choice, wellbeing, and lifestyle value are starting to appear in UK subscription propositions, and they show how banks and fintechs are testing ways to make subscriptions feel more relevant and engaging. But these are still early steps. Most products remain built on predefined bundles, with limited ability for customers to tailor or adjust their benefits.
The next generation of subscription banking will require genuinely modular ecosystems where customers can shape their package to match their needs, interests, and life stage. And to understand what it will take to build such a model, it is worth revisiting why earlier packaged accounts fell short in the first place.
Rethinking the package
Traditional packaged accounts faced three core challenges:
i) They were “sold by banks” not “bought by customers”
ii) They included products/services that were “worthy” but not “engaging”
iii) They were inflexible and misaligned with customer needs and preferences
Addressing these shortcomings requires redesigning both the proposition and the way it is built. Before jumping to solutions, there are five fundamental questions banks must answer if subscription banking is going to succeed this time around:
The key questions to answer for designing successful subscriptions in banking:
What is your objective?
Is your priority revenue maximization today or deepening customer relationships for a longer-term payoff? Answering this question clearly is foundational to the rest of the design process.
Who is your target audience?
Are you targeting a particular demographic, a level of wealth, or a lifestyle? Are you clear on their distinct needs and desires relative to what you can supply? Only when you really understand your audience can you really meet their needs.
What goes into the package?
Will you provide worthy essentials like insurance, discounts on banking products, or something fun and exciting? Will you focus on value and discounts or exclusivity and prestige? Matching the offer to the customer needs and aligning with the organization’s brand positioning is critical to the eventual take-up.
How to structure the packages?
Will you provide a single offer, a tiered offer (e.g. gold, silver, bronze), a use-case offer (e.g. travel bundle) or a modular offer (pick ‘n’ mix)? Each has its role. As a general rule, the lower the level of engagement the simpler the offer structure needs to be. But technology can also help. The easier it is to engage and interact, the more that modular structures come into play.
How much to charge?
Aligning back to the original objective, will you price relatively higher to maximize short-term income, or lower to maximize take-up? Either way, you need to understand the customer willingness-to-pay and price elasticity, two vital metrics that require specialist research to uncover.
Further considerations
To get there, banks will also need to think beyond the product itself:
- Design smart journeys: Offers should surface naturally through app nudges, spending patterns, or lifestyle triggers.
- Invest in smarter tech: Supporting flexible, real-time products requires the right infrastructure.
- Ground decisions in customer insight: The most effective subscriptions grow out of a clear understanding of what customers truly value, how different segments behave, and how those needs change over time. Ongoing research and insight should shape the design and evolution of the offer.
A strategic imperative
Subscription pricing is both an innovation and a competitive opportunity. If high-street banks don’t move on this, fintechs and neobanks will. Some already have.
Banks that succeed will be the ones that :
- Understand customer needs
- Design relevant, smart packages
- Deliver them compliantly and transparently
The technology to do this well and at pace now exists. What is needed is the commitment to use it.
If packaged accounts were once “sold” by banks, the future lies in packages that are actively bought by customers.
Subscription pricing, done well, might just be the next big chapter in UK retail banking
