Lloyds Bank has announced a major change to its packaged current accounts, removing the £50 interest-free overdraft buffer from Silver, Gold and Platinum accounts from June 8, 2026. Customers who go overdrawn will face interest charges on every penny borrowed from the first pound, rather than having a small safety net.
The move is part of a wider overhaul in which the bank is standardising interest-free overdraft amounts, with up to £100 available across its current accounts. In a statement, Lloyds said: 'We're moving to a more consistent approach so customers with similar accounts have the same interest-free amounts.' The bank added that it is contacting affected customers to explain any changes to their interest-free amount and to confirm there is no change to their arranged overdraft limit.
The £50 buffer had previously served as a safety net for customers who occasionally slipped into the red, allowing them to borrow small amounts without incurring costs while awaiting their next payday. Once the change takes effect, daily interest will be applied from the very first pound borrowed on an arranged overdraft.
Additionally, Lloyds is discontinuing its Select account completely, with existing holders being transferred to the basic Classic account, which carries no overdraft cushion. The bank confirmed it is reaching out to affected customers directly to explain the modification.
An overdraft allows customers to borrow money through their current account when the balance drops below zero. Overdrafts can be arranged (agreed in advance) or unarranged (exceeding your limit or spending without prior agreement). Interest is typically charged on the amount used, and not all accounts are eligible for an arranged overdraft. Customers are advised to check with their provider if they are unsure about their interest-free amount.
