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You can find the current article at its original source at https://www.theguardian.com/money/2017/nov/02/lloyds-and-halifax-overdraft-customers-to-pay-smaller-fees-but-not-all
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| Version 2 | Version 3 |
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| Lloyds and Halifax overdraft customers to pay smaller fees – but not all | Lloyds and Halifax overdraft customers to pay smaller fees – but not all |
| (about 16 hours later) | |
| Shake-up announced by Lloyds Group will benefit many customers, but charges are still ‘way out of line’ | |
| Rupert Jones | |
| Thu 2 Nov 2017 12.45 GMT | |
| Last modified on Mon 27 Nov 2017 14.27 GMT | |
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| Many Lloyds Bank and Halifax customers will see their overdraft costs shrink week – but some will pay more. | Many Lloyds Bank and Halifax customers will see their overdraft costs shrink week – but some will pay more. |
| A shake-up of fees announced by Lloyds Banking Group in July took effect on 2 November. Lloyds, Halifax and Bank of Scotland have scrapped existing charges with a new flat fee of 1p a day for every £7 that someone borrows over their fee-free limit. The new fee is charged at the end of each day they use their overdraft. | A shake-up of fees announced by Lloyds Banking Group in July took effect on 2 November. Lloyds, Halifax and Bank of Scotland have scrapped existing charges with a new flat fee of 1p a day for every £7 that someone borrows over their fee-free limit. The new fee is charged at the end of each day they use their overdraft. |
| Lloyds previously said it would lose revenue because of the changes and that nine out of 10 customers would either be better off or no worse off than before. | Lloyds previously said it would lose revenue because of the changes and that nine out of 10 customers would either be better off or no worse off than before. |
| Rachel Springall at Moneyfacts.co.uk says: “A Lloyds Bank Classic current account customer who borrows £500 over seven days will be better off from November by paying a £4.98 fee, whereas they would have previously been charged £6 a month plus £1.81 in interest (19.89% EAR). Those who borrow £500 over 15 days will be 86p worse off than before.” | Rachel Springall at Moneyfacts.co.uk says: “A Lloyds Bank Classic current account customer who borrows £500 over seven days will be better off from November by paying a £4.98 fee, whereas they would have previously been charged £6 a month plus £1.81 in interest (19.89% EAR). Those who borrow £500 over 15 days will be 86p worse off than before.” |
| Guardian Money has previously pointed out that the biggest losers will be customers who have large agreed overdrafts and use them a lot. Someone who has a £1,000 overdraft limit and uses it for 10 days a month will now pay £14.20 in fees, against £10.88 before. If you are permanently overdrawn it will cost even more. | Guardian Money has previously pointed out that the biggest losers will be customers who have large agreed overdrafts and use them a lot. Someone who has a £1,000 overdraft limit and uses it for 10 days a month will now pay £14.20 in fees, against £10.88 before. If you are permanently overdrawn it will cost even more. |
| The new 1p per day charge equates to interest of around 52%, says Andrew Hagger at MoneyComms.co.uk. A standard account-holder borrowing £500 over seven days from Barclays would pay £5.25 (55%), while for Santander it would be £7 (73%), TSB £7.67 (80%), and NatWest/RBS £7.75 (81%). “You can understand rates of 50%-plus for subprime credit cards and guarantor loans where the risk is far greater, but for an agreed bank overdraft, these rates appear unfair and way out of line,” says Hagger. | The new 1p per day charge equates to interest of around 52%, says Andrew Hagger at MoneyComms.co.uk. A standard account-holder borrowing £500 over seven days from Barclays would pay £5.25 (55%), while for Santander it would be £7 (73%), TSB £7.67 (80%), and NatWest/RBS £7.75 (81%). “You can understand rates of 50%-plus for subprime credit cards and guarantor loans where the risk is far greater, but for an agreed bank overdraft, these rates appear unfair and way out of line,” says Hagger. |
| By contrast, First Direct would charge 71p in the above scenario, while the cost at M&S Bank would be £1.14. | By contrast, First Direct would charge 71p in the above scenario, while the cost at M&S Bank would be £1.14. |
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