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  • FIRST POST
    • Jphilg
    • By Jphilg 11th Jul 17, 11:29 PM
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    Jphilg
    LBG change overdraft charging structure
    • #1
    • 11th Jul 17, 11:29 PM
    LBG change overdraft charging structure 11th Jul 17 at 11:29 PM
    Hi All

    First post after lurking for quite sometime.

    Lloyds, BOS and Halifax will shorty announce that they are simplyfying their overdraft fees across all brands.

    The new structure will see a charge of £0.01 for every £7 of an overdraft being used which will debit the account DAILY.


    All over fees such as unarranged overdraft fees will be removed.

    The accounts themselves will remain the same - i.e Halifax Reward will still pay £3 to qualifying customers.

    The group say 9/10 customers will see their charges reduce.

    Obviously this will impact big overdraft users who, for example, would have been capped at £3 a day if they are with Halifax.
    Last edited by Jphilg; 12-07-2017 at 12:10 AM. Reason: Wrong information
Page 1
    • SnowTiger
    • By SnowTiger 11th Jul 17, 11:57 PM
    • 2,959 Posts
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    SnowTiger
    • #2
    • 11th Jul 17, 11:57 PM
    • #2
    • 11th Jul 17, 11:57 PM
    Here and here.

    Both articles mention a fee of 1p per day for every £7 a customer is overdrawn, which applies to both arranged and unarranged overdrafts.

    Cheap for someone who dips in to their overdraft from time to time. Expensive for someone who lives in a large overdraft.

    Most customers will be better off, Lloyds says, but admits those with larger debts will pay more. It says customers who use £100 of a planned overdraft for ten days then borrow £50 more, unplanned, for a further two days are currently charged £18 in a Halifax Reward account and £26.43 in a Lloyds Classic account.
    Under the new system, they will pay just £1.40. This is 14p a day for the planned overdraft use and nothing for the extra £50.

    Andrew Hagger, founder of researchers Moneycomms, calculated that those borrowing four-figure sums will pay more.

    For example, a £2,000 overdraft for 12 days currently costs a Club Lloyds customer £17.47 but will rise to £34.29.

    Read more: http://www.thisismoney.co.uk/money/saving/article-4686590/Lloyds-scrap-unauthorised-overdraft-charges.htm
    • MABLE
    • By MABLE 12th Jul 17, 7:52 AM
    • 3,228 Posts
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    MABLE
    • #3
    • 12th Jul 17, 7:52 AM
    • #3
    • 12th Jul 17, 7:52 AM
    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.
    • MSE Megan F
    • By MSE Megan F 12th Jul 17, 8:35 AM
    • 108 Posts
    • 34 Thanks
    MSE Megan F
    • #4
    • 12th Jul 17, 8:35 AM
    MSE News: Overdraft overhaul for Lloyds, Halifax and Bank of Scotland customers
    • #4
    • 12th Jul 17, 8:35 AM
    Millions of Lloyds, Halifax and Bank of Scotland customers could benefit from an overhaul of bank charges, meaning they won't pay if they go over their overdraft limit and there'll be no fees for missed payments - but some could be worse off...
    Read the full story:
    'Overdraft overhaul for Lloyds, Halifax and Bank of Scotland customers'

    Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.
    Last edited by MSE Luke; 12-07-2017 at 4:18 PM.

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    • brewerdave
    • By brewerdave 12th Jul 17, 9:40 AM
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    brewerdave
    • #5
    • 12th Jul 17, 9:40 AM
    • #5
    • 12th Jul 17, 9:40 AM
    Anybody else confused by this article ?? No fees for an unarranged overdraft??
    • Don80
    • By Don80 12th Jul 17, 10:09 AM
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    • 36 Thanks
    Don80
    • #6
    • 12th Jul 17, 10:09 AM
    • #6
    • 12th Jul 17, 10:09 AM
    Anybody else confused by this article ?? No fees for an unarranged overdraft??
    Originally posted by brewerdave
    You've read that right, that's also what BBC are saying. Barclays apparently did something similar, but prevented you going into an unaarranged overdraft? I imagine that meant simply that any transaction that would put you in that situation would be declined. I don't know if LBG will do the same thing, though I can't imagine what else they could do other than let people rake up debt.
    • One-Eye
    • By One-Eye 12th Jul 17, 10:12 AM
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    One-Eye
    • #7
    • 12th Jul 17, 10:12 AM
    • #7
    • 12th Jul 17, 10:12 AM
    This poor MSE article appears to be factually wrong.

    Arranged overdraft fees will be a flat rate of 1p per £7 borrowed.
    There won't be any unarranged overdraft fees and charges.
    I believe the truth is that fees on ALL overdrafts, arranged or unarranged, will be 1p/day per £7.

    The "Removed" in the table in the last column for "unarranged overdraft" should read 1p/day per £7

    Note that the bank may continue to block payments from the account until the overdraft is paid off.


    Looking around the press reports, about half of them have got it wrong.

    • scooby359
    • By scooby359 12th Jul 17, 10:47 AM
    • 95 Posts
    • 70 Thanks
    scooby359
    • #8
    • 12th Jul 17, 10:47 AM
    • #8
    • 12th Jul 17, 10:47 AM
    Curious for student accounts if it'll affect going into an unauth overdraft - will the new charge apply then, or are they sticking to the £35?
    • MSE Rosie
    • By MSE Rosie 12th Jul 17, 11:00 AM
    • 48 Posts
    • 22 Thanks
    MSE Rosie
    • #9
    • 12th Jul 17, 11:00 AM
    • #9
    • 12th Jul 17, 11:00 AM
    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
    • eskbanker
    • By eskbanker 12th Jul 17, 11:01 AM
    • 5,004 Posts
    • 4,751 Thanks
    eskbanker
    This poor MSE article appears to be factually wrong.



    I believe the truth is that fees on ALL overdrafts, arranged or unarranged, will be 1p/day per £7.

    The "Removed" in the table in the last column for "unarranged overdraft" should read 1p/day per £7

    Note that the bank may continue to block payments from the account until the overdraft is paid off.


    Looking around the press reports, about half of them have got it wrong.
    Originally posted by One-Eye
    To be fair, MSE's report is based heavily on the actual wording in the LBG press release, which does indeed state:
    • From November, there will be a simple, single rate of 1p per day for every £7 of planned overdraft usage, clearly linking the amount charged to the amount and period of borrowing
    • All fees and charges associated with unplanned overdrafts will be removed
    • PeacefulWaters
    • By PeacefulWaters 12th Jul 17, 11:05 AM
    • 6,564 Posts
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    PeacefulWaters
    There'll just be one table of charges for all overdrafts. Planned and unplanned merged into one.

    Badly worded press release, but it does state:

    All customers will pay a simple daily rate with no additional fees and charges
    My bolding.
    Last edited by PeacefulWaters; 12-07-2017 at 11:08 AM.
    • One-Eye
    • By One-Eye 12th Jul 17, 12:14 PM
    • 37,576 Posts
    • 5,975,224 Thanks
    One-Eye
    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 ???)

    • Heng Leng
    • By Heng Leng 12th Jul 17, 3:10 PM
    • 3,935 Posts
    • 1,202 Thanks
    Heng Leng
    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.
    Originally posted by MABLE
    The close of business balance is usually the charge decider.
    • MABLE
    • By MABLE 12th Jul 17, 3:19 PM
    • 3,228 Posts
    • 1,711 Thanks
    MABLE
    The close of business balance is usually the charge decider.
    Originally posted by Heng Leng
    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
    • By Alpine Star 12th Jul 17, 3:21 PM
    • 1,243 Posts
    • 604 Thanks
    Alpine Star
    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 ???)
    Originally posted by One-Eye

    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
    • By Westie983 12th Jul 17, 5:17 PM
    • 3,710 Posts
    • 13,727 Thanks
    Westie983
    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
    Originally posted by 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
    Save 12k in 2017 #16 Total £15130/£12000 126.08%
    Sealed Pot Challenge ~ 10 #97 Total (£252) +£158/£500 = 82.00% ( x 10)
    Xmas 2017 £1 a Day #6 Total £250/£365 = 68.49%
    Virtual Sealed Pot #1 Total £1050/£1000 = 105.00%
    £2 Savers Club 2017 #3 Total (£1450)+£50/£2000 = 75.00%

    Total £18340/£15865 = 115.60%

    I'm a Board Guide on Budgeting & Bank Accounts, Debt-Free Wannabe, Disability Money Matters, and Savings & Investments. I'm a volunteer helping the boards run smoothly, but I'm not a moderator, and do not read all posts. If you see an inappropriate/illegal post then email forumteam@moneysavingexpert.com
    • Westie983
    • By Westie983 12th Jul 17, 5:22 PM
    • 3,710 Posts
    • 13,727 Thanks
    Westie983
    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 ???)
    Originally posted by One-Eye
    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
    Save 12k in 2017 #16 Total £15130/£12000 126.08%
    Sealed Pot Challenge ~ 10 #97 Total (£252) +£158/£500 = 82.00% ( x 10)
    Xmas 2017 £1 a Day #6 Total £250/£365 = 68.49%
    Virtual Sealed Pot #1 Total £1050/£1000 = 105.00%
    £2 Savers Club 2017 #3 Total (£1450)+£50/£2000 = 75.00%

    Total £18340/£15865 = 115.60%

    I'm a Board Guide on Budgeting & Bank Accounts, Debt-Free Wannabe, Disability Money Matters, and Savings & Investments. I'm a volunteer helping the boards run smoothly, but I'm not a moderator, and do not read all posts. If you see an inappropriate/illegal post then email forumteam@moneysavingexpert.com
    • Westie983
    • By Westie983 12th Jul 17, 5:25 PM
    • 3,710 Posts
    • 13,727 Thanks
    Westie983
    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
    Originally posted by Alpine Star
    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
    Save 12k in 2017 #16 Total £15130/£12000 126.08%
    Sealed Pot Challenge ~ 10 #97 Total (£252) +£158/£500 = 82.00% ( x 10)
    Xmas 2017 £1 a Day #6 Total £250/£365 = 68.49%
    Virtual Sealed Pot #1 Total £1050/£1000 = 105.00%
    £2 Savers Club 2017 #3 Total (£1450)+£50/£2000 = 75.00%

    Total £18340/£15865 = 115.60%

    I'm a Board Guide on Budgeting & Bank Accounts, Debt-Free Wannabe, Disability Money Matters, and Savings & Investments. I'm a volunteer helping the boards run smoothly, but I'm not a moderator, and do not read all posts. If you see an inappropriate/illegal post then email forumteam@moneysavingexpert.com
    • eskbanker
    • By eskbanker 12th Jul 17, 7:00 PM
    • 5,004 Posts
    • 4,751 Thanks
    eskbanker
    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 ???)
    Originally posted by One-Eye
    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
    Originally posted by Westie983
    Person A will pay £14.20 as One-Eye correctly stated, as the example was for 10 days not a month!
    • Westie983
    • By Westie983 12th Jul 17, 7:36 PM
    • 3,710 Posts
    • 13,727 Thanks
    Westie983
    ah yes, my post was more about person B, but finished off with the person A too,

    Westie983
    Save 12k in 2017 #16 Total £15130/£12000 126.08%
    Sealed Pot Challenge ~ 10 #97 Total (£252) +£158/£500 = 82.00% ( x 10)
    Xmas 2017 £1 a Day #6 Total £250/£365 = 68.49%
    Virtual Sealed Pot #1 Total £1050/£1000 = 105.00%
    £2 Savers Club 2017 #3 Total (£1450)+£50/£2000 = 75.00%

    Total £18340/£15865 = 115.60%

    I'm a Board Guide on Budgeting & Bank Accounts, Debt-Free Wannabe, Disability Money Matters, and Savings & Investments. I'm a volunteer helping the boards run smoothly, but I'm not a moderator, and do not read all posts. If you see an inappropriate/illegal post then email forumteam@moneysavingexpert.com
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