The SNP’s Consumer Affairs spokesperson has written to the Chancellor calling on the UK government to step in and act as high street banks raise overdraft charges and lending rates for customers, while failing to pass on interest savings to borrowers.
The move comes despite the Bank of England cutting the base rate to an historic low last week of 0.1% in the wake of the coronavirus crisis, and governments across the UK introducing a range of measures to ease the financial burden being felt by businesses and individuals.
HSBC, First Direct and M&S Bank have all increased unauthorised overdraft charges to 39.9%, with Halifax and Lloyds due to lift rates to the same figure next month.
Nationwide and Natwest already charge 39.9% and 39.5% respectively.
Commenting, Patricia Gibson MP (pictured) said:
“At a time of national crisis and when millions of people are seeing their jobs and livelihoods put at risk and cash flows disrupted, it is shameful that banks have chosen to increase the cost of borrowing.
“I have written to the UK Chancellor and the Financial Conduct Authority urging them to step in and act to stop banks from exploiting the current situation.
“The Bank of England base rate cut from 0.5% to 0.1% would save borrowers £600 a year on a £150,000 mortgage.
“Rather than pass these savings on to customers, banks have chosen to plunge millions of customers into further financial difficulty by hiking overdraft charges, personal loans and credit card charges.
“Many of my constituents, and people across the UK, are seeing their livelihoods threatened as they are unable to work due to the current crisis.
“Indeed, charities have seen a huge rise in the number of people struggling with debt in the past week alone.
“Additional charges will only exacerbate the hardship being felt by many.
“This is an unprecedented crisis and the UK government must take whatever action is necessary to protect jobs and livelihoods, and stop the profiteering by high street banks.”