LBG change overdraft charging structure
Jphilg
Posts: 1 Newbie
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.
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.
0
Comments
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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.htm0 -
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.0
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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'
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Anybody else confused by this article ?? No fees for an unarranged overdraft??0
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brewerdave wrote: »Anybody else confused by this article ?? No fees for an unarranged overdraft??
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.0 -
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.
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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?0
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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
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Flag a news story: news@moneysavingexpert.com0 -
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.
- 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
0 - 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
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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 charges0
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