Commenting on the incoming changes to overdraft charges, Money Expert at the Money and Pensions Service, Andrew Johnson, said:
“Don’t panic if you get a letter from your bank about new overdraft charges. If you only dip into it occasionally you may not end up paying more because daily and monthly fixed fees are ending. However if you’re in your overdraft for most of the month or you’re worried about the changes, it’s a good idea to speak to your bank as soon as possible. If you’re likely to face difficulties as a result of the new charges or fall further into debt, the regulator says banks have to consider offering additional options such as a repayment plan.
“Before you do anything, it’s important to work out what using your overdraft is going to cost you and whether alternatives are better value for money. More information should be available from all banks in the next few months which will make it easier to do comparisons. Ideally, get a full picture of what money you have coming in and going out each month so you can set yourself a budget and take control of all your spending. ”
MaPS tips to reduce your overdraft usage:
- Sign up to alerts from your online bank account which can warn you if you are about to fall into the red
- If you’re struggling to manage an overdraft or other debt, get debt advice as soon as possible. Our debt advice locator is a good place to start
- Depending on your credit score, a personal loan might also allow you to clear the sum at a lower interest rate.
- Take steps to stay on top of your money so you don’t run out before the end of the month. Use the free online budget planner from the Money Advice Service.
Read more in this blog from the Money Advice Service, What the changes to overdraft fees mean for you.
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About the Money and Pensions Service
The Money and Pensions Service vision is everyone making the most of their money and pensions.
MaPS is an arm’s-length body sponsored by the Department for Work and Pensions (DWP), and has a joint commitment to provide access to the information and guidance people across the UK need, to make effective financial decisions over their lifetime. The organisation also engages with HM Treasury on policy matters relating to financial capability and debt advice.
MaPS brings together the free services previously delivered by the Money Advice Service, The Pensions Advisory Service and Pension Wise. MaPS offers customers guidance and appointments over the telephone, online and in person.
For further information stakeholders should visit the Money and Pensions Service website www.moneyandpensionsservice.org.uk