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At the start of the Coronavirus pandemic, the majority of banks put on hold their planned overdraft interest rate rises to help consumers struggling financially due to the pandemic, but now many banks are set to go ahead and increase their rates.
The banks that are due to increase their fees during July and August are Barclays, first direct, HSBC, NatWest, Royal Bank of Scotland (RBS) and Starling, with Santander also due to raise fees in the future.
Earlier in the year, many banks announced that they would be increasing the interest rates on their arranged overdrafts. Barclays, for example, will be increasing its rate to 35.00%, while first direct and HSBC will increase their rates to 39.0%.
A full list of the planned overdraft interest changes can be found here.
These overdraft rate changes were initially decided before the Coronavirus pandemic began impacting the UK economy. The increases were done in response to the Financial Conduct Authority’s (FCA) ban on fixed overdraft fees and its ruling that unarranged overdraft charges cannot be higher than those on arranged overdrafts.
In April, Lloyds, Halifax and Bank of Scotland automatically offered interest-free overdrafts for up to £500, which is due to end on 6 July 2020. In addition to this, many other banks offered interest-free overdrafts for a limited period during the height of the lockdown to help customers who were facing financial difficulties. Yesterday, the FCA confirmed further support for those in overdraft debt, including providing extra support for those who have borrowed in excess of £500 on their overdrafts.
With many of the interest-free overdraft buffers put in place during the lockdown already at an end, in addition with the planned interest increases to overdrafts, borrowing through an overdraft is one of the most expensive ways for consumers to borrow money via a high street bank. As such, consumers in overdraft debt should focus on paying off their overdraft as quickly as possible. Those financially impacted by the Coronavirus pandemic should contact their bank to discuss the support available to help them reduce and clear their overdraft debt. Those in overdraft debt should also read our guide Seven steps to getting (and staying) overdraft-free.
Overdrafts are designed mainly for short-term borrowing and, ideally, any money borrowed should be repaid within a few days. Consumers needing to make an emergency purchase might be better off using a credit card, ideally a 0% purchase credit card, instead of an overdraft if they cannot repay the money immediately. This is because the APR on credit cards is usually lower than overdraft charges. Those needing to borrow a higher amount should consider a personal loan, as, again, these tend to be a cheaper form of borrowing compared to overdrafts.
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Britain’s GDP contracted by 0.1% in March, according to data released by the Office for National Statistics (ONS) today. “The March decline highlights the pressure the economy is now coming under from the cost of living squeeze and the danger of it falling into outright recession later this year,” said Rupert Thompson, Investment Strategist at Kingswood. The services sector, which includes contributions from education, arts and entertainment, and food service among others, fell 0.2% last month and was the main contributor to this decline.
Britain’s GDP contracted by 0.1% in March, according to data released by the Office for National Statistics (ONS) today.
Four in ten savers have been forced to use their savings account to help cope with the rising cost of living over the past 12 months. This is according to Yorkshire Building Society and the Centre for Economics and Business Research’s Inflation Nation report, which was released today.
Four in ten savers have been forced to use their savings account to help cope with the rising cost of living over the past 12 months.
Customers looking to switch current accounts to HSBC’s Advance or Premier current account can make use of a £170 switching incentive with immediate effect. The incentive is meant to help consumers challenged by the cost of living crisis, according to Tom Wolfenden, HSBC UK’s Head of Retail.
Customers looking to switch current accounts to HSBC’s Advance or Premier current account can make use of a £170 switching incentive with immediate effect.
Britain’s GDP contracted by 0.1% in March, according to data released by the Office for National Statistics (ONS) today. “The March decline highlights the pressure the economy is now coming under from the cost of living squeeze and the danger of it falling into outright recession later this year,” said Rupert Thompson, Investment Strategist at Kingswood. The services sector, which includes contributions from education, arts and entertainment, and food service among others, fell 0.2% last month and was the main contributor to this decline.
Britain’s GDP contracted by 0.1% in March, according to data released by the Office for National Statistics (ONS) today.
Four in ten savers have been forced to use their savings account to help cope with the rising cost of living over the past 12 months. This is according to Yorkshire Building Society and the Centre for Economics and Business Research’s Inflation Nation report, which was released today.
Four in ten savers have been forced to use their savings account to help cope with the rising cost of living over the past 12 months.
Customers looking to switch current accounts to HSBC’s Advance or Premier current account can make use of a £170 switching incentive with immediate effect. The incentive is meant to help consumers challenged by the cost of living crisis, according to Tom Wolfenden, HSBC UK’s Head of Retail.
Customers looking to switch current accounts to HSBC’s Advance or Premier current account can make use of a £170 switching incentive with immediate effect.
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