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UK banks reduce overdraft rates, but is this the end of the saga?

As we approach the end game with regards to overdraft charges and the ongoing court case, a number of banks in the UK have decided to cut their overdraft charges to levels more in line with those suggested by the regulator. While this particular move has been well received by consumer groups and consumers alike, there is an underlying feeling that what the banks give with one hand they will take away with the other. So what can we expect in the future?

When you consider that overdraft charges brought in billions upon billions of pounds for the UK banking sector each year there is no way they can afford to give up this income stream without putting something else in its place. Recently we have seen suggestions that the myth of "free banking" is coming to an end and all bank accounts will be charged monthly fees or charges for services which are currently free.

While the ongoing court case for repayment of "excessive overdraft charges" will see many people receive hundreds if not thousands of pounds in compensation, this may not be the best move for consumers in the long run. It seems almost inevitable that an end to "free banking" is just around the corner but who will be the first bank to call the end?

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