In-Accountancy

News and Views

Changes To Overdraft Fees

The Financial Conduct Authority (FCA) has confirmed it will introduce new rules in April this year that it says will make the costs of overdrafts clearer and easier to compare.

The rules will mean banks can only charge for overdraft users a simple annual interest rate – without additional fees and charges.

According to the FCA, seven out of ten overdraft users will be better off or see no change in cost.

Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said:

‘Our changes expose the true cost of an overdraft. We have eliminated high prices for unarranged overdrafts.

‘This will result in a fairer distribution of charges, helping vulnerable consumers, who were disproportionately hit by high unarranged overdraft charges, and many people who use their overdraft from time-to-time.’

However, many banks have responded by hiking the interest rates they charge on overdrafts and several of the largest providers are set to introduce rates of up to 40%.

The FCA has sent a letter to the providers asking them to explain what influenced their decision and to ask how the banks will deal with any customers who could be worse off following the changes.

It said some firms could reduce or waive interest for customers who are in financial difficulty because of their overdraft.

Internet links: FCA press release FCA letter

Related articles

Accountants for Amazon Sellers
Limited Companies

Amazon Sellers – top tips to ensure your long term success

Have you ever considered selling on Amazon or eBay, setting up an eCommerce business, or a little side hustle?

If this sounds like you, it seems you are not alone.

More and more people these days are selling online to boost their income, sometimes just for a bit of fun and with no higher plans, and other times in the hopes of turning this so called side hustle into their dream job and their very first foray into entrepreneurship…

We have been receiving lots of enquiries recently about accounts and tax for Amazon sellers, so I’ve recorded a little video outlining our top tips if you are thinking about giving it a go yourself…

Read More »

Find out how we can help?

Lectus scelerisque a donec tincidunt litora per eleifend eget ut sagittis conubia pharetra scelerisque dui ultricies duis parturient auctor adipiscing.

 

Let’s start a conversation 

    Subscribe me for updates and news from In Accountancy

    IN-ACCOUNTANCY