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Barclays customers have been voicing their frustrations about the strict overdraft limits the bank has been implementing recently, which has left many with a significantly reduced safety net – or without one at all.
The bank has said it has been reviewing overdraft limits since 2021 and only contacts customers if it deems their overdraft to be unaffordable.
In a number of Twitter responses, the bank said it “often” has to make the “difficult decision” to amend overdrafts to ensure “responsible” lending options.
However, many of those facing new restrictions claim to have barely touched their overdrafts or have significant amounts of money held with the bank, leaving many questioning its motivations.
One customer wrote to the Telegraph explaining that he had an above-average income with a “significant” sum of money in the account, yet his overdraft was still reduced from £3,200 to £490.
According to Christopher O’Hearn from Bishop Auckland in County Durham, the letter from Barclays read: “We regularly review overdraft limits to make sure customers don’t borrow more than is manageable. Based on the income information we have, it looks like your limit might be higher than we’d offer if you applied for an overdraft today.”
Mr O’Hearn told the Telegraph: “We have had the account for nearly 30 years, and for the past year or so, there has been a significant balance in the account. The bank told us they were reducing the limit so customers do not borrow more than they can afford. And that if we do not like it, we need to send them statements from other accounts and proof of income.”
Twitter user @mrs_kwb wrote: “My bank wrote to me and said they were reducing my overdraft limit because they think I can’t afford the interest. Then they wrote to me and offered me a loan with a rate much higher. Good to see they are looking out for me. Bless Barclays Bank.”
@bruce1402 tweeted that his overdraft was removed because he hadn’t used it in the last 12 months.
He wrote: “The bank that likes to say NO. Been with them over 40 yrs and hardly ever needed my overdraft facility. Just when I’m about to need it they have decided to remove it. How is that helping consumers at this difficult time. [sic]
“Surprised that Barclays views those who regularly use an overdraft as a better risk than those who rarely use an overdraft!”
Meanwhile, user @sarahjpill said: “My father has banked with you for over 40 years ..as have I! He’s been told you are taking his overdraft away due to cost of living and amount of his income! I shall be helping him change banks … For me too! Letter is patronising.” [sic]
Express.co.uk has contacted Barclays for comment.
As defined by Barclays, an overdraft limit is a borrowing facility which allows people to borrow money through their current account. There are two types of overdrafts, arranged and unarranged.
It states: “An arranged overdraft is a pre-agreed limit, which lets you spend more money than you have in your current account. It can be a safety net to cover short-term outgoings, like an unexpected bill.”
People fall into an unarranged overdraft when they spend more money in their current account and have not agreed to an arranged limit in advance. In these instances, people are often charged interest depending on the amount of time they remain in it.
Barclays has also been criticised for its large spate of bank closures set to take place over the course of 2023 and 2024.
Up to 156 closures have been announced so far, which comes in response to more customers taking business online. See the full list of closures here.
