Money saving tips: Banks including Lloyds and Santander providing overdraft ‘buffers’

Saving money in the current environment can be both difficult and necessary in equal measure. The impact of coronavirus cannot be understated as it has led to an unprecedented level of income loss and unemployment.


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Recent figures from the ONS revealed that of the businesses in the UK still trading, 19 percent of their workforce had been furloughed between April 6 and April 19.

The impact on individuals has been substantial as figures released today showed that individual declarations for Universal Credit rose steeply in March to peak at nearly 150,000 cashes.

That figure only started to gradually decline in recent weeks but there were still nearly 30,000 claims by May 5.

People have been keen to seek out cost saving opportunities in light of this, with recent research highlighting that vast amounts of people have cancelled direct debits and plan not to reinstate them post lockdown.

Thankfully, there has been no shortage of advice offered in recent weeks as financial experts, public organisations and private companies have all stepped forward to offer help where they can.

New advice from Joel Kempson, a Financial Services expert for, highlighted to crucial elements of life which people always seek help for: banking and borrowing.

Some of his tips provide actionable advice for consumers while others detail automatic reactions which could be taken advantage of.

His banking tips focus primarily on reducing costs:

Check if you’re paying interest on debt

“Paying interest on debt is one way many people spend money when they don’t need to.

“If you are paying off existing debt on a credit card that’s charging you interest, you can avoid paying another penny more by shifting it to a zero percent balance transfer credit card and pay it off over the time of the interest-free period.”

While prevalent, some people may not have debt attributable at all.

However, nearly everyone will have a current account of some sort and this is the focus of Joel’s next tip:

Watch out for current account fees

“Most banks do not charge fees for standard current accounts.

“If you are being charged, make sure that any perks such as cashback, insurance or interest are worth the cost.

“If they are not, switching is simple and easy.”

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Could my savings be doing more?

Everyone should advisably have savings of some form and Joel highlights that now is an important time to seek out the best options:

“It is now more important than ever to make sure that your savings are in the right place.

“That could mean transferring to an easy access account, finding the best interest rate or even using your savings to pay off debts.”

Due to the direness of the situation, some people may feel forced to take on further debt to keep themselves afloat.

The first port of call will likely involve moving into overdrafts and thankfully, new rules put in place by the regulator should help consumers in this area:


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Should I get an overdraft?

“Overdrafts can be a useful tool to manage your cashflow problems, but it is essential you make sure you have the right one to avoid sky-high interest rates.

“This week has seen a change in rules regarding overdraft fees after the FCA (Financial Conduct Authority) instructed lenders to simplify charges.

“Banks must now advertise only an interest rate, without daily fees. It was hoped this would make the cost of borrowing through an overdraft easier to understand and compare with other types of borrowing, but in response many banks have raised overdraft interest rates to as much as 40 percent.

After pressure from the FCA, banks including Lloyds, TSB, Bank of Scotland, Halifax, Santander and HSBC are now automatically providing temporary interest-free overdraft buffers of up to £500 for three months to help customers struggling during the pandemic.

“These changes are time-limited, so expect overdraft interest rates to rise once again this summer.”

Loan and credit card repayments

Joel’s final tips concern debt products which can usually concern consumers highly.

Credit cards and other loan agreements can be a problem for financially hit consumers but Joel highlights that additional rules from the FCA could provide repricve in this area: “After a change in Financial Conduct Authority rules, many lenders are now offering to help customers struggling to pay off debts.

“From 14 April 2020 lenders must offer payment holidays of up to three months to customers affected by the pandemic.

“These holidays will not impact your creditworthiness or incur additional fees.

“Some lenders are also waiving penalties and fees for missed payments. Contact your lender to find out what options are available.”

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