WELL DONE TO BARCLAYS – FIRST BANK TO AGREE TO WAIVE OVERDRAFT CHARGES
It will not charge customers using arranged overdrafts from Friday till end April 2020
Congratulations to Barclays Bank for being the first to announce it will suspend interest charges for its customers who need to dip into their arranged overdraft facilities. Until now, even those people using arranged overdrafts were facing penal interest charges of around 40% a year. Now, the bank says its customers with authorised overdraft facilities will not be charged interest from 27 March until at least the end of April.
The bank is promising further help after this as well, but has not specified what it will be.
This is excellent news and it is absolutely right that our major banks step up to help customers during this time of crisis. Having received billions of pounds of support since 2008, I am delighted to see one of our major banks taking this decision to help customers forced to borrow to tide themselves over. Barclays is showing the way for the rest of the industry. I hope other banks will decide to follow their example.
During this unprecedented emergency situation, with individuals suddenly finding themselves out of work without warning, businesses having to suspend operations, families still needing to pay for essential spending and help from Government not yet having arrived, many will run out of money. Support for the self-employed is coming, but they do not yet know when and they cannot all wait. They still have to fund their daily living costs and have no money coming in.
We know that 40% of the working age population had less than £100 in savings before this crisis began, which inevitably means many will have to turn to borrowing, either via overdraft or credit cards, or other sources. If they also have to pay ruinous interest rates, this will add to their misery.
I hope that this excellent decision will herald more help and support for customers through this period of disruption.
Of course, I applaud this brilliant decision, but I hope I can be forgiven for also requesting banks to consider similar interest holidays for credit card customers, who are currently facing record repayment rates of over 20% on average, help for those needing unarranged overdraft loans and perhaps extending the interest holiday beyond April if necessary. It is absolutely right that our major banks step up to help customers at this time of crisis. So well done to Barclays for being the first and let’s hope others will rapidly follow suit.
This welcome announcement of interest holiday for arranged overdrafts, adds to measures already in place to help customers during the crisis. It is important people can take advantage of these if they need to and also check what their own bank is offering.
For Barclays’ Personal banking customers suffering financial hardship because of coronavirus the measures include:
o Repayment holidays on residential mortgages for up to 90 days, with a new online form to speed up applications https://www.barclays.co.uk/coronavirus/mortgages/
o Option to switch residential capital repayment mortgages to interest only for up to 12 months
o Stopping late payment and cash advance fees on credit cards for 90 days for all customers
o Removing penalty charges to access fixed savings accounts early
o A dedicated web page for customers suffering hardship, or who anticipate financial difficulties www.barclays.co.uk/coronavirus/
Coronavirus Business Interruption Loan scheme: Business Banking customers needing urgent cash flow support due to the crisis can apply for the Coronavirus Business Interruption Loan (CBIL) which launched on 23 March 2020. https://www.barclays.co.uk/business-banking/borrow/coronavirus-business-interruption-loan/ . This aims to support viable UK businesses with a turnover of no more that £45 million per annum, providing businesses with lending of up to £5 million with the Government covering the first 12 months of interest payments
I do hope this emergency situation will not last too much longer, but until we have more clarity, it is really important to protect as many people financially, as well as physically, as we can. Financial ruin can be damaging to health and even life-threatening, if it impacts mental wellness, heart conditions, blood pressure and so on. We all have a part to play in helping others if we can.