In light of the FCA’s announcement (This link will open in a new window) this morning, Nationwide Building Society is today announcing further support for members whose finances have been impacted by the coronavirus outbreak.
The Society will temporarily reduce its overdraft interest rate from 39.9% APR to 18.9% APR for three months. The change will be applied to all FlexDirect, FlexPlus and FlexAccount current accounts, so there is no need for members to contact the Society to request the new rate.
Members in financial difficulty can continue to apply online for an interest-free overdraft holiday. The interest-free holiday will apply for three months from the date the holiday is put in place. Nationwide will text to acknowledge requests. The interest free period will apply on the full overdraft balance – targeting our support at those who need the help the most.
Britain’s biggest building society is continuing to support all its members impacted by coronavirus and has set up a dedicated coronavirus support page to make it as easy as possible to arrange payment breaks.
The online resource is intended for anyone who is or anticipates being in financial difficulty due to coronavirus - from loss of income or employment to anyone struggling to pay their bills or meet financial obligations. So, in addition to the overdraft interest holiday, members can also arrange a three-month payment break on their credit card, personal loan and mortgage payments for both residential and Buy-to-Let home loans.
Once members have selected the payment holiday they require, a simple online form needs to be filled out, which will then be processed by Nationwide. The measures will not impact someone’s credit score although the interest will continue to accrue and will be factored into monthly payments after the payment-free period ends. However, overdrafts interest holidays will not carry the interest over.
The Society is asking members to apply online where possible in order to accelerate applications and free up telephone lines in order to reduce waiting times, particularly for elderly and vulnerable members who may not use online services.
The Society’s support package comes in addition to the work Nationwide already does to provide support for those who are vulnerable or in financial difficulty. This includes penalty-free early access to savings in fixed term accounts and increased credit card or overdraft limits to help get through a short period of reduced income.
Sara Bennison, Chief Product and Marketing Officer at Nationwide Building Society, said: “These are worrying and uncertain times, which is why we continue to look at ways we can support our members with their finances through this difficult time.
“We want to ensure that we target our support at those who really need it the most, which is why we are offering an interest-free holiday on the whole overdraft rather than a limited amount. This allows members in financial difficulty to avoid overdraft charges all together giving them one less thing to worry about for a few months.
“However, to ensure we also help our wider current account membership, we are also temporarily reducing the interest rate we charge more broadly on overdrafts.”