LBG change overdraft charging structure

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  • One-Eye
    One-Eye Posts: 66,257
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    Ask Lloyds what the charges will be for these two examples.

    Both people go £1000 overdrawn for 10 days.

    Person A - Arranged overdraft limit £1000 (charge = £14.20)

    Person B - Arranged overdraft limit £100 (charge = £1.40 ???)

  • System
    System Posts: 178,077
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    MABLE wrote: »
    Hopefully for me it will make no difference. I sometimes go overdrawn by a few thousand pounds some days but the money is back in the account by midnight the same day.

    The close of business balance is usually the charge decider.
  • MABLE
    MABLE Posts: 4,077
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    Heng_Leng wrote: »
    The close of business balance is usually the charge decider.

    Lloyds advised me provided it is cleared funds and it is transferred on the internet I then have up until midnight. I have done this a few times and never received any charges. I like you thought at one time it was close of business.
  • Alpine_Star
    Alpine_Star Posts: 1,354
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    One-Eye wrote: »
    Ask Lloyds what the charges will be for these two examples.

    Both people go £1000 overdrawn for 10 days.

    Person A - Arranged overdraft limit £1000 (charge = £14.20)

    Person B - Arranged overdraft limit £100 (charge = £1.40 ???)


    There are some examples attached to the press release that seem to indicate there is no charge at all for unauthorized borrowing:



    Case study 4 -
    £1000 planned borrowing for 7 days, including 2 days of £50 unplanned
    borrowing


    Tracey is a Halifax customer with a Reward current account, who has used £1000 of her £1000 planned overdraft limit for 5 days. A payment from her account also took her into an unplanned overdraft. She has gone £50 pounds into her unplanned overdraft for 2 Days.

    In all, she has been overdrawn for 7 days. She has also had 1 direct debit payment stopped due to insufficient funds when her unplanned overdraft was not extended further.

    She has a fee-free buffer of £50 and pays £1 per day for any amount of planned overdraft borrowing below £2,000.

    She also pays a flat daily fee of £5 for her unplanned borrowing. Her account does not charge returned item fees.

    The total cost of this borrowing under the current approach would be £15.

    With the new approach, Tracey will pay a single rate of 1p per day for every £7 of borrowing with no other fees or charges. Although she has unplanned borrowing, there are now no
    additional charges for this. Therefore the cost of this borrowing will be £9.94.


    If Tracey’s mobile number is registered with the Bank, she would have received a text alert notifying her that she had insufficient funds. At this point, she could apply to extend her planned limit, or transfer money from another account, to prevent the payment being stopped. She would also receive a letter informing her that the payment hasn’t been made.


    http://www.lloydsbankinggroup.com/globalassets/documents/media/press-releases/lloyds-banking-group/2017/20170712-lloyds-banking-group-launches-new-approach-to-overdrafts.pdf
  • Westie983
    Westie983 Posts: 5,213
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    MSE_Rosie wrote: »
    Hi One-eye,

    We asked this exact question to Lloyds Banking Group when writing the story, and it confirmed that the 1p per £7 charge will not apply to unarranged overdrafts. If you could confirm where you've heard otherwise, I'll look into it again.

    Thanks,
    MSE Rosie

    This is correct, there will be no charges for unwarranted overdrafts, and the buffer is changing from £50 to £6.99 so payments will either bounce with no fee or go through as long you dont go over - £7.00.

    The charges of £5 for unauthorised overdrafts have been removed and you can only spend whats in your account plus £7 you will no longer *from Nov be able to go overdrawn for more then £7.

    The charges will triple for those customers that live in their overdrafts more then £700 a month. Those that use up to £700 will not see much change in the fees, and those that use less then £200 will be better off (not inc Halifax URCA customers, where the first £300 will remain fee free)

    All customers will received personalised letters from 2nd August telling them what the impact will be on them, by reviewing their spending patterns and overdraft usage.

    Those that will worse off will be directed to the banks helping hand team to see if they can help them, or if there is an alternative option rather then using the overdraft (Personal loan/Savings)

    Just a waiting game to wait for the letter to be received, when you will then have two months notice.

    Westie983
    I’m a Forum Ambassador and I support the Forum Team on the Banking & Borrowing, and Reduce Debt & Boost Income boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySaving Expert.
    Save 12k in 2023 #58 Total (£4500.00) £2500.00/£5000 = 50.00%
    Sealed Pot Challenge ~17 #24 Total (£55.00) £0.00/£500 = 0.00%
    Xmas 2023 £1 a Day #13 Total (£85.00) £344.00/£365 = 94.24%
    Virtual Sealed Pot #1 Total (£500) £550.00/£500 = 110.00%
    £2 Savers Club 2023 #17 Total (£25.00) £45/£300 = 15.00%
    The 365 1p Challenge 2023 #7 Total £656.19/£667.95 = 98.23%
    Total £4095.19/£7332.95 = 55.84%
  • Westie983
    Westie983 Posts: 5,213
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    One-Eye wrote: »
    Ask Lloyds what the charges will be for these two examples.

    Both people go £1000 overdrawn for 10 days.

    Person A - Arranged overdraft limit £1000 (charge = £14.20)

    Person B - Arranged overdraft limit £100 (charge = £1.40 ???)


    Person B wont be able to go overdrawn by £1000 as they only have £100 overdraft so when they get to 0.00 they will only have the £7 buffer left, and any payments will not go through/bounced DD with no bounced fees or unauthorised overdraft fees.

    Person A will pay £1.42 a day for their overdraft = £44.02 compared to £35 at the moment.

    (£1000/£7*0.01x31days)

    Westie983
    I’m a Forum Ambassador and I support the Forum Team on the Banking & Borrowing, and Reduce Debt & Boost Income boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySaving Expert.
    Save 12k in 2023 #58 Total (£4500.00) £2500.00/£5000 = 50.00%
    Sealed Pot Challenge ~17 #24 Total (£55.00) £0.00/£500 = 0.00%
    Xmas 2023 £1 a Day #13 Total (£85.00) £344.00/£365 = 94.24%
    Virtual Sealed Pot #1 Total (£500) £550.00/£500 = 110.00%
    £2 Savers Club 2023 #17 Total (£25.00) £45/£300 = 15.00%
    The 365 1p Challenge 2023 #7 Total £656.19/£667.95 = 98.23%
    Total £4095.19/£7332.95 = 55.84%
  • Westie983
    Westie983 Posts: 5,213
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    Ambassador
    There are some examples attached to the press release that seem to indicate there is no charge at all for unauthorized borrowing:



    Case study 4 -
    £1000 planned borrowing for 7 days, including 2 days of £50 unplanned
    borrowing


    Tracey is a Halifax customer with a Reward current account, who has used £1000 of her £1000 planned overdraft limit for 5 days. A payment from her account also took her into an unplanned overdraft. She has gone £50 pounds into her unplanned overdraft for 2 Days.

    In all, she has been overdrawn for 7 days. She has also had 1 direct debit payment stopped due to insufficient funds when her unplanned overdraft was not extended further.

    She has a fee-free buffer of £50 and pays £1 per day for any amount of planned overdraft borrowing below £2,000.

    She also pays a flat daily fee of £5 for her unplanned borrowing. Her account does not charge returned item fees.

    The total cost of this borrowing under the current approach would be £15.

    With the new approach, Tracey will pay a single rate of 1p per day for every £7 of borrowing with no other fees or charges. Although she has unplanned borrowing, there are now no
    additional charges for this. Therefore the cost of this borrowing will be £9.94.


    If Tracey’s mobile number is registered with the Bank, she would have received a text alert notifying her that she had insufficient funds. At this point, she could apply to extend her planned limit, or transfer money from another account, to prevent the payment being stopped. She would also receive a letter informing her that the payment hasn’t been made.


    http://www.lloydsbankinggroup.com/globalassets/documents/media/press-releases/lloyds-banking-group/2017/20170712-lloyds-banking-group-launches-new-approach-to-overdrafts.pdf

    This is correct, Tracey will no longer have the buffer of £50 from November, so when she gets the text to say that they payment will take her over her overdraft limit, she will need to increase planned overdraft limit, pay in funds before 2:30 the same day to bring her back under the -£7 if neither of these happen then the payment will not go through but there is no fee for declined payment or DD failing to be paid.

    Westie983
    I’m a Forum Ambassador and I support the Forum Team on the Banking & Borrowing, and Reduce Debt & Boost Income boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySaving Expert.
    Save 12k in 2023 #58 Total (£4500.00) £2500.00/£5000 = 50.00%
    Sealed Pot Challenge ~17 #24 Total (£55.00) £0.00/£500 = 0.00%
    Xmas 2023 £1 a Day #13 Total (£85.00) £344.00/£365 = 94.24%
    Virtual Sealed Pot #1 Total (£500) £550.00/£500 = 110.00%
    £2 Savers Club 2023 #17 Total (£25.00) £45/£300 = 15.00%
    The 365 1p Challenge 2023 #7 Total £656.19/£667.95 = 98.23%
    Total £4095.19/£7332.95 = 55.84%
  • eskbanker
    eskbanker Posts: 30,401
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    Forumite
    Westie983 wrote: »
    One-Eye wrote: »
    Ask Lloyds what the charges will be for these two examples.

    Both people go £1000 overdrawn for 10 days.

    Person A - Arranged overdraft limit £1000 (charge = £14.20)

    Person B - Arranged overdraft limit £100 (charge = £1.40 ???)


    Person B wont be able to go overdrawn by £1000 as they only have £100 overdraft so when they get to 0.00 they will only have the £7 buffer left, and any payments will not go through/bounced DD with no bounced fees or unauthorised overdraft fees.

    Person A will pay £1.42 a day for their overdraft = £44.02 compared to £35 at the moment.

    (£1000/£7*0.01x31days)

    Westie983
    Person A will pay £14.20 as One-Eye correctly stated, as the example was for 10 days not a month!
  • Westie983
    Westie983 Posts: 5,213
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    Ambassador
    ah yes, my post was more about person B, but finished off with the person A too,

    Westie983
    I’m a Forum Ambassador and I support the Forum Team on the Banking & Borrowing, and Reduce Debt & Boost Income boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySaving Expert.
    Save 12k in 2023 #58 Total (£4500.00) £2500.00/£5000 = 50.00%
    Sealed Pot Challenge ~17 #24 Total (£55.00) £0.00/£500 = 0.00%
    Xmas 2023 £1 a Day #13 Total (£85.00) £344.00/£365 = 94.24%
    Virtual Sealed Pot #1 Total (£500) £550.00/£500 = 110.00%
    £2 Savers Club 2023 #17 Total (£25.00) £45/£300 = 15.00%
    The 365 1p Challenge 2023 #7 Total £656.19/£667.95 = 98.23%
    Total £4095.19/£7332.95 = 55.84%
  • Westie983
    Westie983 Posts: 5,213
    First Anniversary Name Dropper Photogenic First Post
    Ambassador
    MABLE wrote: »
    Lloyds advised me provided it is cleared funds and it is transferred on the internet I then have up until midnight. I have done this a few times and never received any charges. I like you thought at one time it was close of business.

    It will be changing to 2:30 from 3:30, after that payments will bounce.

    Fee structure will be calculated as of the balance at 2:30 each day.

    Wait for the letter to arrive 2nd August for more information.

    Westie983
    I’m a Forum Ambassador and I support the Forum Team on the Banking & Borrowing, and Reduce Debt & Boost Income boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySaving Expert.
    Save 12k in 2023 #58 Total (£4500.00) £2500.00/£5000 = 50.00%
    Sealed Pot Challenge ~17 #24 Total (£55.00) £0.00/£500 = 0.00%
    Xmas 2023 £1 a Day #13 Total (£85.00) £344.00/£365 = 94.24%
    Virtual Sealed Pot #1 Total (£500) £550.00/£500 = 110.00%
    £2 Savers Club 2023 #17 Total (£25.00) £45/£300 = 15.00%
    The 365 1p Challenge 2023 #7 Total £656.19/£667.95 = 98.23%
    Total £4095.19/£7332.95 = 55.84%
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