Your bank could be about to tell you that you've less cash available – here's what you need to know

How are balances displayed under the new rules?

The idea behind the new rules is to make it clearer to customers that an overdraft, even if agreed, is a debt. So in a nutshell, your available balance will only show how much money you actually have in your account, and won't include any overdraft facility you've agreed.

The actual overdraft you have on your account ISN'T changing, so if you have an agreed overdraft you're still able to use it – but when you log into your bank account or use a cashpoint it won't be counted as part of your available balance.

Here's an example to explain the change:

Let's say you've an agreed overdraft of £500 and you're £100 into your overdraft – so you owe the bank £100. Previously, many banks would have shown your 'available balance' as £400. But under the new rules, your balance will be shown as -£100, highlighting the fact you owe the bank – even though you can still spend another £400 if you need to before hitting your overdraft limit.

Some banks also told us the new balance would take into account any pending payments – for example, if you've paid for something on your debit card but the transaction hasn't yet appeared on your bank statement.

Individual banks may display balances slightly differently to others – but to give you an idea of how this could look when banking online, let's suppose you're a Lloyds customer with £1,000 in your account, a pending transaction for £10 and a £500 arranged overdraft facility. Here's how it would look currently:

And here's how the same situation will look after the changes are implemented. 'Funds available' of £1,490 has changed to a 'balance after pending' of £990, with a separate overdraft limit of £500 – though the amount of money you actually have is unchanged: