Martin Lewis explains why your 'available bank balance’ might plummet one week before Christmas

We’ve all seen our bank balance drop dramatically at some point– whether we’ve been on a Christmas shopping spree, or bought that extra round we forgot about.

Friday, 6th December 2019, 9:33 am
Updated Monday, 16th December 2019, 11:04 am

However, if you open your online banking and see an unexpectedly low balance don’t panic – banks are changing the way they display your available accounts.

Money Saving Expert Martin Lewis has warned that you may notice your 'available funds' drop after 18 December, because banks will no longer include customers' overdraft amounts when showing their available funds.

At the moment, if you have £10 in your bank and a £500 overdraft, your available funds will be £510. However, when the changes come into effect, your available funds will show as £10.

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The changes are being introduced by the Financial Conduct Authority in a bid to help people realise that overdrafts are debt, and not part of their balance.

Speaking on Good Morning Britain, Martin Lewis said: “Currently, many banks include your permitted arranged overdraft when showing you your 'available balance' - so if you have £100 in your account but also have an arranged overdraft facility for £500, your available balance will appear as £600."

"From Wednesday December 18, new rules from the regulator Financial Conduct Authority will ban banks from doing this.

"In this example above, your available balance will appear as £100 instead - and if you went into your overdraft, you'd see a negative number."

Martin Lewis - Andrew Matthews/PA Wire
Martin Lewis - Andrew Matthews/PA Wire

HSBC, First Direct and M&S Bank have already made the changes, and Barclays, Co-op Bank, Monzo and Nationwide already exclude overdrafts from customers' available balances.

However, some customers said that the changes were unclear, and that they could lead to further money mismanagement.

On Twitter, one HSBC customer said: “Please reinstate the way it was. This is systematically unclear and could lead to money mismanagement- could you imagine already being in a somewhat vulnerable position financially and this only serves to increase someone’s anxiety.”

Another added: “This is ridiculous, it’s not clear. I just want to see how much I have available without having to work it all out. It’s very misleading and I’m considering changing accounts because of this.”

Martin Lewis

And another customer said: “Had a proper panic when I logged on this morning. I thought someone had been spending on my card OR that I had massively overspent. I haven't seen any proactive communications that would warn people about this in advance to prevent this panic.”