Lloyds Bank confirms £50 rule change for UK bank accounts in June | Personal Finance | Finance
Thousands of Lloyds Bank customers are set to lose a small overdraft safety net from next month, as the lender prepares to scrap its £50 interest-free buffer on several current accounts. From June 8, customers with Lloyds Silver, Gold and Platinum package accounts will no longer be able to dip up to £50 into an arranged overdraft without paying interest. Instead, charges will apply from the first pound borrowed.
The change also affects customers with the bank’s Select account, which is being withdrawn altogether. Existing Select customers will be moved onto Lloyds’ fee-free Classic account, which does not include an interest-free overdraft allowance.
Until now, the £50 buffer has acted as a small cushion for customers who occasionally go overdrawn before payday or while waiting for money to arrive. Once the new rules come in, anyone using an arranged overdraft on the affected accounts will pay daily interest on the full amount borrowed.
A Lloyds spokesperson said the bank is moving to “a more consistent approach” so customers with similar accounts have the same interest-free overdraft terms. The bank said it is contacting affected customers directly about the changes. The affected accounts are packaged bank accounts, meaning customers pay a monthly fee in exchange for added benefits such as insurance and breakdown cover.
The Silver account costs £11.50 a month and includes UK and European travel insurance, AA breakdown cover and mobile phone cover. The Gold account, which is no longer open to new customers, costs £16.95 a month and includes worldwide travel cover. Lloyds’ Platinum account costs £22.50 a month and offers worldwide family travel insurance, as well as an annual lifestyle benefit such as cinema tickets or streaming subscriptions.
Customers with Club Lloyds accounts are not affected by the move. They will continue to receive a £100 interest-free arranged overdraft allowance.
The removal of the £50 buffer could make a difference to customers who regularly slip into their overdraft by small amounts. For those paying monthly fees for packaged accounts, the change may also prompt a review of whether the remaining benefits are still worth the cost.
Anyone affected may want to check how often they use the included perks, such as travel insurance, phone cover or breakdown assistance, and compare that against the monthly fee and any potential overdraft costs.
