Debt management industry chiefs welcomed news that bank charges could be on the way down, at least for some of their clients.
The RBS-NatWest banking group, now majority owned by the UK taxpayer, has announced that it plans to reduce overdraft charges. The decision comes ahead of a much awaited decision from the Supreme Court regarding the regulation of bank charges by the Office of fair trading (OFT).
The cost of a bounced cheque will be slashed from £38 down to just £5, and will come into force on 1st October this year. This represents a fee reduction of nearly 87%. The charge for paying an item on an account that is overdrawn will fall by 50%, from £30 to just £15.
Brian Hartzer, the head of UK retail banking was upbeat about the announcement, believing that it was good news for consumers, particularly because “fees for unarranged borrowing have been an area of ongoing concern”.
“As we look ahead there are many issues to consider, but we thought it was time to move this particular customer concern forward by cutting our charges.
“As it relates to past charges we are awaiting the outcome of the industry-wide bank charges test case,” added Mr Hartzer.
The news that RBS NatWest is reducing fees could well prompt similar moves from the other large UK banks. Debt advice specialists believe that this could help to relieve the pressure on many over indebted consumers, which have found themselves in financial difficulty in the wake of the credit crunch.
Record levels of personal debt have resulted in more people in need of debt help programmes such as an IVA, and any reduction in fees and charges could help these hard up individuals in their quest to become debt free.