HSBC UK is changing its overdraft rules from tomorrow amid financial impact of coronavirus

HSBC UK has announced changes to its overdraft system, which will come into effect from tomorrow. The bank’s temporary measure comes amid the financial impact of the coronavirus pandemic affecting a huge number of Britons.


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From Thursday March 26, 2020, HSBC UK is introducing a temporary £300 interest-free buffer on overdrafts.

The bank said that this move, which is the equivalent of the weekly National Living Wage, will be available to customers with Bank Acccount and Advance Accounts for a period of three months.

It will see an increase on the £25 buffer, which had been introduced as part of the bank’s new overdraft structure, which recently came into effect.

Tracie Pearce, HSBC UK’s Director of Retail Banking said: “The recent changes to our overdraft structure meant that seven in ten customers who went into the red would see no change in cost or it would cost less, with those using an unarranged overdraft, who are potentially the most vulnerable, benefitting most from these changes.

“With this temporary buffer for the first £300, up to nine in ten customers who use an overdraft will see no additional cost, based on our previous structure.

“We are here for our customers in these truly extraordinary times.

“While we put in place a package of support for customers across a number of product areas, we recently added the option of a mortgage payment holiday, which we had not previously offered, and now we are providing additional relief on overdrafts for millions of our current account customers.

“This will provide some welcome short term cashflow support at this crucial time.”

Writing in his weekly Money Saving Expert email this week, Martin Lewis commented: “HSBC has said to help with coronavirus it’ll automatically increase buffer zones (which let you go overdrawn interest-free) on its Bank and Advance accounts, from £25 to £300 for three months from Thursday.

“I hope others will join, but if you’re struggling, see our full overdraft coronavirus help. Also see help on loans and credit cards.”

HSBC UK said the following package of support is in place for personal customers in financial difficulty, which could include:

  • Short term support through reduced or deferred payments for mortgages, with longer term support through extending the remaining term of their mortgage, switching rates or switching part or all to interest-only mortgage arrangements. This now includes a mortgage payment holiday.
  • Giving customers early access to fixed rate savings accounts without closure charges.
  • Support for customers with unsecured debt through reduced payments or breathing space to defer payments due; these solutions are tailored to individual customer need.
  • The option of a temporary increase in credit card and overdraft limits.


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HSBC UK has also highlighted the increasing difficulty in maintaining service levels through contact centres and branches during the coronavirus pandemic.

While this issue affects all customers, the bank said it has having a “disproportionate impact” on the vulnerable in society.

As such, the bank has asked that wherever possible, custoemrs consider managing their interaction with HSBC through the bank’s online or mobile channels.

“Please be assured, if customers are unable to use our online or mobile services, we are there for them. It may just take a little longer than usual to get through to us,” HSBC UK added.

HSBC has recently changed its overdraft charges, ahead of new rules from the Financial Conduct Authority (FCA) coming into effect in April.

The main changes, which came into effect on March 14, 2020, included a removal of the £5 daily fee for going into an unarranged overdraft.

HSBC UK also reduced the maximum monthly charge from £80 a month to £20 a month on unarranged overdrafts.

Instead, the bank will charge customers a rate of 39.9 percent APR for arranged and unarranged overdrafts.

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