Lloyds Bank has announced a significant change to its overdraft policy, scrapping the £50 interest-free buffer on arranged overdrafts for thousands of customers. From June 8, 2026, the perk will be removed, impacting holders of Silver, Gold, and Platinum packaged accounts. The bank, which operates branches in Birmingham, is also discontinuing its Select account, converting it into a basic Classic account, thereby eliminating the Select's £50 interest-free buffer as well.
What Are Packaged Accounts?
Packaged accounts are accounts that come with additional insurance benefits and features in exchange for a monthly fee. Lloyds packaged accounts typically offer travel insurance, vehicle breakdown cover, and mobile phone insurance, potentially saving customers money on these products. The insurances are provided by third parties, such as the AA for breakdown cover.
Silver Account Benefits
The Silver account provides all the benefits of Club Lloyds, plus European and UK Family Travel Insurance up to age 65, AA Breakdown Family Cover with Roadside Assistance, and mobile phone insurance. It also offers no fees when using the debit card abroad.
Platinum Account Benefits
The Platinum account includes all Club Lloyds benefits, plus Worldwide Family Travel Insurance up to age 80, AA Breakdown Family Cover with Roadside Assistance, At Home and National Recovery, and mobile phone insurance.
Each account carries a different monthly fee. The Platinum account delivers total annual insurance benefits worth an average of £756, for a cost of £270 per year (£22.50 per month), resulting in an average saving of £486 annually. The Silver account provides total annual insurance benefits averaging £332, for a cost of £138 per year (£11.50 per month), yielding an average saving of £194 per year.
Customers affected by the change are advised to review their account options and consider whether the packaged accounts still offer value without the interest-free buffer.
