On 19 April 2023, the FCA published Evaluation Paper 23/1: An evaluation of our 2019 overdrafts intervention (EP23/1).

In Policy Statement 19/16: High-cost credit review: Overdraft policy statement, the FCA introduced a package of remedies in the UK market for overdrafts. In the same publication, the FCA announced that they would carry out an ex post impact evaluation (EPIE) of these remedies. The FCA Economics Department has carried out the evaluation, with peer review provided by an academic expert, along with support from colleagues across the FCA. EP23/1 presents the FCA’s methodology, results and lessons learned from this exercise.

The rules on pricing required firms to stop charging fixed fees for overdraft borrowing, to charge no more for an unarranged overdraft than an arranged one, to price overdrafts with a single annual interest rate, and advertise overdrafts with a representative annual percentage rate. The FCA’s new rules are also aimed at encouraging competition in the market.

The results found in EP23/1 demonstrate that, each customer who has an arranged overdraft or access to an unarranged overdraft saved, on average, £17.40 in charges in 2021 due to the new pricing rules.

The FCA estimates that the 30% of customers living in the most deprived areas in the UK saved £153 million in 2021.