Glum Virgins cause rethink

One of the best-known current account mortgages on the market has been given an overhaul - partly in recognition of the fact that some potential customers were being put off by the way it worked.

The Virgin One account pools your current account, home loan and any other borrowings and savings into a single account.

Virgin One says its account is superior to some of the other current account mortgages, because it allows you to manage all your finances through a single account - there is just one interest rate and you don't have to switch money between accounts.

With some of the "offset" mortgages such as those from Intelligent Finance and Woolwich, the loan, current account and savings are in different "pots".

But some people seemed uncomfortable with having one overall balance which,
because it included the mortgage, was a constant reminder they were in debt. Checking your balance and being told that it's minus £80,000 leaves some people feeling glum.

Virgin One conceded that for some, the concept was "a bit of a leap too far," so it redesigned the account.

It's still one account with one interest rate (the headline rate is 5.2%) but people will now be able to view their finances as if they were separate accounts. From this month, it will start rolling out the new concept to its 70,000-plus existing customers, and it will be offered to all new customers.

The Virgin One account is 100% owned by Royal Bank of Scotland. This week, NatWest (also owned by RBS) launched its own version of the account called NatWest One. The accounts, NatWest says, "are essentially the same."