Martin Lewis provided insight on new proposed FCA rules, which are expected to be launched in the coming weeks. As he detailed, customers may soon be able to request up to £500 with a zero percent charge.
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Martin Lewis issues urgent warning on COVID ‘unfair banking lottery’
The FCA today proposed a range of temporary measures designed to help customers in difficult circumstances.
Martin highlighted that the proposals are still being reviewed but the regulator is keen to get them launched quickly.
The FCA’s website provided clarity on what the overdraft measures will encompass: “Consumers who need additional financial support because of coronavirus with an existing arranged overdraft will be able to request from their provider that up to £500, on their main personal current account, is provided at 0 percent for up to three months.”
“Alongside this customers without an overdraft on their main personal current account are able to request this facility.”
Martin went on to analyse how this ties in with the FCAs recent changes to overdraft charges.
From 6 April, lenders will only be able to charge a single annual interest rate for both arranged and unarranged overdrafts.
The FCA believes that this will be hugely beneficial for customers: “This will significantly reduce the cost of unarranged borrowing, also providing vital protection during this period.
“The end of fees and charges for borrowing means that all consumers will be clear about what they’re paying.
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“Under the FCA’s rules over 7/10 consumers will be better off or no worse off.”
Martin detailed that some customers may already be benefiting from these overdraft changes.
He explained that some of the banks have been doing this already.
However this, when fully rolled out, will get rid of the “banking postcode lottery”
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