Overdraft fees at Lloyds TSB and Bank of Scotland will increase from October, according to a recent Guardian article.

Starting 2 October, the interest rate on overdrafts will increase by up to 5 percent at these banks, following the model set by Halifax and Smile, which have already announced plans to raise overdraft rates.

The article claims that some customers will see the annual fees on their current accounts rise by as much as £24 a year.

The worst hike in fees is that overdraft rates at one bank will surge from 10.43 percent up to 15.43 percent in autumn. As a result, a customer who is overdrawn by £2,000 will pay £100 more in interest over a year.

Kevin Mountford, banking spokesperson at moneysupermarket.com, said: “Although the rate increases may be small in some cases, it’s the collective effect of such rises combined with other increasing costs that will impact on already squeezed household budgets.”

This information in this post references an article by Lisa Bachelor, deputy editor of Observer Cash. Read her original article here.

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Poundy

Old-fashioned in nature but sophisticated in thinking, Poundy is happy to offer his words of wisdom to anybody interested in Pounds to Pocket — behind the shapely moustache lies an abundance of knowledge.

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