Changes to overdraft charges could benefit those with debt management plans

The changes to Lloyds TSB's current account could help those struggling to cope with a debt management plan as it will no longer charge consumers who go overdrawn without permission.

From December 2nd, Lloyds will cut the daily and monthly fees for customers who go overdrawn without permission, while the charge for bounced cheques will be halved to £5.

The bank states that 70 per cent of its customers will benefit from reduced banking costs. The money saved could go towards a debt management plan.

Chris Tapp, director of Credit Action, said: "I think banks are looking for ways to reform the charges and make them clearer, so they are not seen to be quite so punitive and heavy handed."

However, he still urges consumers to avoid going into their overdrafts without authorisation as it is difficult to communicate with the bank and fees could still be incurred.

Furthermore, people need to look around for the best banking deals, as the market is changing and different banks are offering different advantages, he added. Exception: Stack empty.