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[jambosans]

So, I've already started a brief guide over in Reclaims in regards to the changes HBOS are making to their current account range come December. However seeing as mailing has begun (and we're already seeing some posts in regards to this), I thought it would be more useful to give the guide it's own thread, where posters can be referred to, and discuss, etc.


From the 6th of December 2009 the majority of Halifax/ Bank of Scotland current accounts will see changes relating to charges and naming. Accounts effected by one or both of these changes are the: Ultimate Reward Current Account; Standard Current Account; and High Interest Current Account. The Reward Current Account already has these changes in place.


The Changes

Below are details on the the changes which apply (from 06/12/09) to the accounts listed above, see the next section for account specific changes:-

1. The accounts will no longer pay credit interest, or charge debit interest for the use of an arranged or unarranged overdraft.
2. If you fund £1000 or more to the U.R.C.A. (from 06/12/09) or Reward Current Account you will receive £5 net payment the following calender month.
3. Any arranged overdraft up to £2500 will cost £1 per day to use. The first £300 arranged overdraft on an U.R.C.A. will remain fee free.
4. Any arranged overdraft above £2500 will cost £2 per day to use.
5. Any unarranged overdraft will cost £5 per day to use.
6. There will no longer be a charge for Unpaid Items.
7. Overdrafts will have the first £10 as a fee free "buffer zone".
8. You have until close of business to clear any arranged or unarranged overdraft to avoid paying the daily fee.*
9. Fees are calculated at the end of the calender month. They are detailed on said month's statement, and fees debit at the end of the following calender month. For example: the first set of fees, for the month of December, will debit at the end of January (31/01/2010).
10. Uncleared cheques will off-set fees on debit balances from the date they are paid in (provided this is before close of business). For example, if you are overdrawn £50, and pay in a cheque for £100, over the counter before close of business, you will stop incurring daily fees from that day onwards.
11. These changes will take effect on the 6th of December 2009.
12. From 06/12/09 there will be only 3 current accounts, the: Ultimate Reward Current Account; Reward Current Account and relaunched Standard Current Account.

How They Effect You

Below are details on how these changes effect your account (they are coloured coded as above for quick reference):-

Ultimate Reward Current Account

• Will adopt the new fee structure, described above.
• Will have the first £300 of an arranged overdraft fee free.
• Will gain the £5 Reward if funded with £1000 or more in a statement month.
• Everything else with remain the same, the account will still cost £12.50 per month, however with a £5 Reward this is potentially reduced to £7.50.

Reward Current Account**

• Will remain the same, following the fee structure, described above.
• £1000 minimum funding per month will be a requirement. How this is going to be implemented, I am not sure.
• Existing customers are not being downgraded if they do not meet funding requirement.
• There is no penalty if you do not fund £1000 in a statement month.
• You are allowed one joint and one sole Reward Current Account (this takes effect on 01/11/09). Those with more are not having their accounts closed or downgraded.

Standard Current Account

• Will be relaunched to new custom, providing a free current account for those who are unable to fund the £1000 required by the Reward Current Account.
• Will adopt the new fee structure, described above.
• H.I.C.A.'s will be rebranded to Standard Current Account.
• Existing Standard Current Account holders will only be effected by the new fee structure, described above.

High Interest Current Account

• Will be rebranded as the relaunched Standard Current Account.
• Will adopt the new fee structure, described above.
• Will not gain £5 Reward, the account would have to be upgraded to the Ultimate Reward Current Account or Reward Current Account.

Advice

• If you fund the account with £1000 or more in a statement month, upgrade to the Reward Current Account (at the very least) to gain the £5 Reward. The account will not change in any other respect other than the type (i.e. sort code and account numbers, regular payments, cards, etc. will remain the same).
• If you use an arranged overdraft above £1500/ £2000, the difference between what you are currently paying in debit interest and the new fee structure should be negligible (I may stand corrected, I have not calculated it myself). Upgrading to the Reward Current Account and funding £1000 to gain the £5 should further help reduce this.
• If you use an overdraft below £1500, try and pay off as much as you can before December.
• If you still use an overdraft for the majority of the month (e.g. 15+ days), consider reducing it to £300 and upgrading to the U.R.C.A. This will mean you pay £12.50 per month (potentially £7.50 with £5 Reward deducted) and have the first £300 of an arranged overdraft fee free.
• If you are unable to reduce, or feel you are going to struggle to repay your overdraft, a cheaper alternative may be a credit card or loan. I would contact Halifax/ Bank of Scotland to discuss your options. Either book an appointment or go in branch; or call Telephone Banking on 08457 20 30 40 (or 0113 380 9574 - all product areas, select banks accounts, this number should be cheaper to call on a mobile and possibly landline)

HBOS Suggestions

Below are a list of alternatives HBOS are offering - you must meet the criteria, and they are for those effected by the changes on 06/12/09:-

• Merge overdrafts - if you have two or more overdrafts with HBOS under the same charging structure, you can combine them on the one account to save on monthly fees. For example: Reward Current Account overdrawn -£450 (limit -£500); Standard Current Account overdrawn -£1100 (limit -£1500); therefore 2 x £1 daily fee x 31 days = £62. Combining both overdrafts onto the Reward Current Account giving a new overdrawn balance of -£1550 (new limit - £2000) will half the monthly fees.
• Balance transfer to HBOS credit card - this option has rather strict criteria and is only available to existing HBOS credit card customers, but one important point to note: the transfer rate is not the standard 3% handeling fee, it is in fact the card's purchase rate. For example transferring a £1000 overdraft to a Halifax All in One Credit Card would be charged at 15.9% APR (if we use the typical rate for this example). Now I think this equates to less (as the rate is annual), however I'm not sure - perhaps someone can clarify.

Those Not Effected

Below are accounts not effected by the changes on 06/12/09:-

• Student Current Account
• Easycash
• Cardcash***

For more details on these account's charges and interest rates, click the below link:-

Halifax Website - Interest rates and account fees


Additional Information

*Halifax Bank of Scotland define close of business (in relation to applicable fees) as the end of the day, which is technically 00:00.
** Reward Current Account existing and revised (effective 01/11/09) Terms & Conditions PDF (link)
***The Cardcash charging structure is being brought in line with HBOS's other basic bank account, the Easycash, effective 01/11/09, Unpaid Item charges will be reduced from £35 to £15.


From the Horse's Mouth

Lloyds Banking Group Website - Press Release - 02/10/09 - "Halifax confirms move to daily overdraft charging structure" PDF (link)




Disclaimer: Some of the information contained on this guide may be incorrect, and I will update with contributions from the community, see below footnote.


Footnote: Any members who pick up any mistakes, or have more accurate, updated information, please PM or post on the thread, and I will update accordingly. Also, thanks in advance for any contributions, I won't reply on the thread, but I will mention updates made by MSE'ers below.


Updates: 05/10/09 - rb10 - changes relating to cheques setting-off daily fees (The Changes: 9). apt - updated Reward Current Account section in relation to change of terms & conditions, effective 01/11/09. 12/10/09 - noh - link to PDF Reward Current Account terms & conditions (existing and those effective 01/11/09). 17/10/09 - natweststaffmember - link to PDF official LGB press release in regards to changes. 26/10/09 - rb10 - updating to include £10 fee free buffer. 02/11/09 - new section "HBOS Suggestions" - details HBOS specific alternatives.


Please do not "Quote" the entire thread, this makes other contributions difficult to read.

[rb10]

An excellent post.

There is one other change - which is that uncleared cheques will be used to off-set any overdraft charges from the moment that they are paid in, rather than after 2 working days, as is standard at the moment with Halifax & most other banks.

So if you are overdrawn by £50, and pay in a cheque for £100 today, you will stop paying the daily charges from today onwards (unless the cheque bounces).

[lemonjelly]

I have the HICA. I opened 3 reward accounts too. Will I be able to upgrade my HICA to another reward account? Or will I fall foul of the no more than 3 rewards line?

[apt]

I suspect you will fall foul of the limit. Anyone who has a 'High Interest' current account and one or two Reward accounts and does not go overdrawn regularly should upgrade the High Interest account to a reward account this month as the Halifax is reducing the number of reward accounts people can open from 1 November.

[lemonjelly]

Originally Posted by apt

I suspect you will fall foul of the limit. Anyone who has a 'High Interest' current account and one or two Reward accounts and does not go overdrawn regularly should upgrade the High Interest account to a reward account this month as the Halifax is reducing the number of reward accounts people can open from 1 November.

Thanks. Not sure this answers my predicament though. As I already have the 3 reward accounts, I wouldn't have thought they'd allow me to change the HICA to a fourth reward account?

The reward accounts are in addition to the HICA which I'd had for years & is my main account.

So does that mean my HICA will become a standard current account & the rewards will remain as they are?

[jambosans]

Originally Posted by lemonjelly

Thanks. Not sure this answers my predicament though. As I already have the 3 reward accounts, I wouldn't have thought they'd allow me to change the HICA to a fourth reward account?

Well, the rules at the moment (I think), have not set a limit on the number of Reward Current Accounts you can have. So if you change before the updated terms and conditions come into effect on 01/11/09 you should be able to do so. Once the change has been implemented, as I have suggested, there are no plans to downgrade or close the accounts of those with more than 2 Reward Current Accounts (although to be honest, I cannot see this policy lasting long). So you could potentially have four. I would contact Halifax to find out, and be sure to update the thread if you get a definite answer.

Originally Posted by lemonjelly

So does that mean my HICA will become a standard current account & the rewards will remain as they are?

Yes.

[lemonjelly]

Originally Posted by jambosans

Well, the rules at the moment (I think), have not set a limit on the number of Reward Current Accounts you can have. So if you change before the updated terms and conditions come into effect on 01/11/09 you should be able to do so. Once the change has been implemented, as I have suggested, there are no plans to downgrade or close the accounts of those with more than 2 Reward Current Accounts (although to be honest, I cannot see this policy lasting long). So you could potentially have four. I would contact Halifax to find out, and be sure to update the thread if you get a definite answer.

I thought that currently you could have a maximum of 3 reward accounts? Hence why I was asking the above.

Cheers!

[noh]

Originally Posted by lemonjelly

I thought that currently you could have a maximum of 3 reward accounts? Hence why I was asking the above.

Cheers!

The current rules allow a maximum of 3 Reward accounts.
The T+C's dated 1st November allow 1 sole and one joint.

On 6th December the HICA will become a standard current account.

I too have 3 reward and 1 HICA.

Here is a previous post by rb10 offering a suggestion of what to do in this situation.

[jambosans]

Originally Posted by lemonjelly

I thought that currently you could have a maximum of 3 reward accounts? Hence why I was asking the above.

Cheers!

Sorry about that. I stand corrected, I only have a humble one Reward Current Account.

[BBurkill]

I just got my letter, done my sums and checked them. I have three accounts with the Halifax (soon to be reduced to zero), One is my wages account, which pays most bills, then the joint Housekeeping account, and a third which I use as a slush fund to pay off my credit cards (and cannot close due to my ex wife being obstinate and wont take ID to a branch). It currently costs me about £1.00 for my overdraft, and when the changes come into force, it will cost me £15.00. If I switched accounts it would cost me £12.50(£7.50), so I am still worse off by at least £6.50) It is painfully obvious what they are doing, clawing back money lost over bad investments, by stinging the most needy. If I didnt need an overdraft, I would not have one. I dont see the need for the change, and I dont see why I should be forced to change to another account with them. If I am in credit with them for the majority of the month, why should I be obliged to pay for that privilege. I am going to complain and then switch my bank, having been with them for 35 years. I personally think this is a disgusting ploy. I predicted that the Halifax would go downhill when they got bought by LLoyds, and in my opinion, I was proved right., Can anyone tell me the BEST overall bank for a part time overdrafteee

[Lady_K]

I'm not sure what to do about my accounts and my daughter has a couple with Halifax too, they called her today saying she had to make an appointment to discuss her accounts trying to get her to change her account now as they said it will automatically go over in Dec anyway. She said she couldnt get in to an appointment its difficult for her with her working hours and the woman got quite stroppy with her.

I myself have 1 standard current account and 1 cardcash account, I know the cardcash account wont change but I'm not sure what is best to do about my standard one.
At the moment I am getting just over the £1000 funded into my account a month but it could well change to below £1000 at some stage. In what way do they mean funded though is it by earnings or any other type of funding like tranfers or any kind of credit? and what would happen if my monthly income does drop?
Will I have to pay a fee no matter what I do? I chose to have no overdraft facility onmy account and don't want one.

My daughter has 2 Standard current accounts, one just a back up to keep some things separate which has no wages going into it at all just transfers from her main account. The other one is her main account that gets funded by over £1000 a month wages. Will she get charged too and what is the best thing for her to do? She also has no overdraft facility by choice on either of the accounts

I did get some information books through the post but to be honest I'm not good at reading and taking in that kind of thing so find it hard to understand plus it did say on it do not worry you do not have to do anything it will all be done for you on it so I just didnt think anything of it I thought it was just the usual updated info

Do you think its advisable to chage bank accounts for both of us?

[jambosans]

Originally Posted by BBurkill

If I am in credit with them for the majority of the month, why should I be obliged to pay for that privilege. I am going to complain and then switch my bank, having been with them for 35 years. I personally think this is a disgusting ploy.

You are paying for the use of the overdraft, although I think I get your point (however irrelevant). Complaining isn't going to effect a policy change, but moving will have a bigger impact - you just have to pay off your overdrafts first. Although, if you pay off your overdrafts, you are potentially £5 better off with the Reward Current Account .

Originally Posted by BBurkill

I predicted that the Halifax would go downhill when they got bought by LLoyds, and in my opinion, I was proved right.,

This would have been in the works long before Lloyds TSB took over, for a number of reasons. Firstly the Reward Current Account was launched in February, one month after the takeover was finalised. These kinds of changes cannot be implemented in a month, the Reward Current Account simply "tested the water". Secondly, Lloyds TSB have not changed their product line. If, eventually, the brands unite, under a unified product range, LTSB or HBOS will make further changes.

Originally Posted by BBurkill

Can anyone tell me the BEST overall bank for a part time overdrafteee

Who is to say other banks will not implement similar changes? The reality is, Halifax Bank of Scotland have reacted (although they will not admit) to the likely defeat in the Supreme Court and subsequent (very likely) assessment by the O.F.T. that charges are unfair. Even though these charges will be subject to the same scrutiny, they have been lowered, and they are more clear cut. Cross-subsidy of banking is something I believe is a reality, those who borrow have to pay. Historically, those who borrowed without the prior consent of the banks, were charged more (the main subsidiser). Now, with these changes, unarranged charges are reduced, and for some, arranged charges are increased (switching subsidy roles). They are a business, and lending is a big revenue stream, it also helps with the costs of a "free in credit" model.

[lemonjelly]

Originally Posted by noh

The current rules allow a maximum of 3 Reward accounts.
The T+C's dated 1st November allow 1 sole and one joint.

On 6th December the HICA will become a standard current account.

I too have 3 reward and 1 HICA.

Here is a previous post by rb10 offering a suggestion of what to do in this situation.

Thanks for this - very helpful.

Originally Posted by jambosans

Sorry about that. I stand corrected, I only have a humble one Reward Current Account.

No worries! Perhaps I wasn't clear.

I'm thinking of applying for an account elsewhere, perhaps with the £100 & free switching service or something.
Problem is the number of SO's/DD's I have coming from the HICA.

I'll have a mull, I've got a couple of months

[Treefrog]

As a non tax payer I recieve my inbterest gross however these Reward accounts will only pay net and then it is up to the individual to reclaim the tax back from HM Revenue & Customs ("HMRC"). I feel that this is wrong on two counts
1. It may only be a £1 per month but that extra makes a difference when you are on a low income.
2. This will make extra work for HMRC and will cost the tac payers more.
Can Halifax be made or shamed to change the way they pay their reward so that Rewards are paid gross?

[Lady_K]

Am I worrying for no reason? Is it as simple as this link appears?

http://www.halifax.co.uk/bankaccount...ntsweoffer.asp

Is this right?

If I keep my current account it looks from the above that it will be classed as a Reward current account if I fund it with over £1000 in a month. If I do I get £5 credit from halifax.
(Does this mean the balance has to remain at £1000 or above though and does it include transfers from anywhere including own bank accounts)

OR
If it falls below £1000 funded in a month nothing happens apart from I lose out on the £5 credit from halifax in that particular month

PLUS
Daughter has over £1000 funded to her presently standard current account each month but was told she will automatically be changed to the £12 a month one in Dec is this right and if not would she be better off changing to that one anyway? She also has a second current account with Halifax that is only funded by transfers how will she stand with that?

It looks like they don't give £5 back to the £12 a month account from the above link but this has been said otherwise somewhere else on this forum stating that you only end up paying £7.00 a month in the end

[opinions4u]

Originally Posted by Treefrog

Can Halifax be made or shamed to change the way they pay their reward so that Rewards are paid gross?

It is the Halifax who are complying with HMRC rules.

It's HMRC who need to change, not the bank.

[Lady_K]

Hope I have done the right thing but I rang Halifax and asked them to confirm a few of the questions I asked above and after doing so have requested to be changed over to the Reward Current account now rather than wait until December.

It seems that all the difference will be is I will get the £5 credit a month from Halifax, no other changes. I don't have any overdrafts anyway and don't want any so I thought whats the point waiting till December.

She did say if I had not put in a request to change it I would just stay on the Standard current account without the £5 credit.

She said anyone can request to change at any time from now and after December to any of the accounts and I can move back if I want to.

She also confirmed that if I fall below £1000 a month all that will happen is that I won't get the £5 credit

She also said that it can be funding from anywhere including transfers between accounts

I hope there are no catches

Pity my other account is a cardcash one that they have never allowed me to upgrade because it does not have any wages paid into it each month even though I have always had money it in. I might try again to swap it over, my daughter has 2 accounts both current so I don't know why mine has to remain as cardcash.

[opinions4u]

Originally Posted by Lady_K

I hope there are no catches

The catch is in the overdraft charging.

As this doesn't affect you, enjoy the fiver!

A bottle of wine on payday perhaps?

[jambosans]

Originally Posted by Lady_K

She said anyone can request to change at any time from now and after December to any of the accounts and I can move back if I want to.

You cannot go back to the High Interest Current Account. This is account is no longer available to existing or new custom. As the guide explained, it is being completely re-branded to the Standard Current Account from 06/12/09. So as it stands, you cannot downgrade to anything (as the Reward Current Account is the only free current account HBOS offer), and as of 06/12/09, you can downgrade to the Standard Current Account (although I don't know why you would?).

Originally Posted by Lady_K

She also confirmed that if I fall below £1000 a month all that will happen is that I won't get the £5 credit

She also said that it can be funding from anywhere including transfers between accounts

I hope there are no catches

If you don't have or use an overdraft, then the Reward Current Account makes complete sense. Everything else you have stated is covered in the guide. Perhaps I should have made it more clear that the Reward Current Account has had these changes in place since launch in February.

Originally Posted by Lady_K

Pity my other account is a cardcash one that they have never allowed me to upgrade because it does not have any wages paid into it each month even though I have always had money it in. I might try again to swap it over, my daughter has 2 accounts both current so I don't know why mine has to remain as cardcash.

The Cardcash account is a basic bank account, therefore it is not designed to have an overdraft/ credit facilities. So you cannot simply upgrade, you have to apply for a full current account (as of December this will be either the Standard Current Account, Reward Current Account or Ultimate Reward Current Account). From 01/11/09 you will only be able to have one sole and one joint Reward Current Account. Unless you open an account now, come November (unless you open a joint), you will not be able to open another Reward Current Account.

[jambosans]

Originally Posted by Treefrog

As a non tax payer I recieve my inbterest gross however these Reward accounts will only pay net and then it is up to the individual to reclaim the tax back from HM Revenue & Customs ("HMRC"). I feel that this is wrong on two counts
1. It may only be a £1 per month but that extra makes a difference when you are on a low income.

It is actually £1.25 extra.

Originally Posted by Treefrog

2. This will make extra work for HMRC and will cost the tac payers more.
Can Halifax be made or shamed to change the way they pay their reward so that Rewards are paid gross?

I would have thought you could receive the payment gross by filling out an R85 (link to HMRC) and provide it to Halifax. However the Reward payment is technically not interest as it is not calculated against a percentage of a credit balance. They are merely providing an incentive for funding £1000 or more into the account each month. So in all honesty, I'm not sure.

Halifax do suggest, as opinions4u has stated, you must claim back from HMRC:-

This payment is 'net' of income tax. This means we pay it after taking off income tax at the rate set by law (currently 20%). If you are a higher-rate taxpayer, you may have to pay extra income tax on the reward payment. The gross amount is £6.25. This is the amount before we take off income tax. You may reclaim tax from HM Revenue & Customs if the amount of tax we have taken off is more than you have to pay. To find out more visit www.hmrc.gov.uk/incometax.