17th Apr 2020
More lenders have announced they will offer interest-free overdraft buffers for customers struggling financially during the coronavirus pandemic.
On 8 and 9 April 2020 respectively, TSB and Lloyds announced the first £500 of customers’ arranged overdrafts would be interest free. Lloyds has confirmed the buffer for its customers will end on 9 July 2020.
Both lenders have said customers that already have an arranged overdraft do not need to take any action to benefit.
Since the Covid-19 crisis began, the number of universal credit claims has increased by nearly one million, while the number of individuals expected to be furloughed is estimated by the BBC to be more than nine million.
Rishi Sunak, Chancellor of the Exchequer, and the Financial Conduct Authority (FCA) have called for lenders to help cash-strapped homeowners in light of the Covid-19 crisis. The FCA proposed the offering of interest-free overdrafts and repayment holidays on credit cards and loans for up to three months.
TSB and Lloyds are just two of the lenders easing the financial strain on customers during this unpredictable time.
HSBC has introduced a three-month £500 interest-free buffer for bank and advance account customers, and has reduced the rate charged above its interest-free buffer from 39.9% to 19.9%.
Santander is waiving the interest on the first £500 of any arranged overdraft between 6 April and 9 July, and has introduced a temporary discount interest rate of 19.9%.
So far, lenders have approved more than one million mortgage repayment holidays for customers.