Barclays is overhauling its current account offering, including reductions to charges for customers who go beyond their agreed overdraft limit.

In addition, from 2 June, Barclays is simplifying its range of new current accounts for personal customers, offering customers a choice of accounts which includes an interest-bearing current account and a new packaged account, whilst reaffirming its commitment to keep free in-credit banking as an option for customers.

Personal Reserve is designed to act as a safety net for customers who exceed their agreed overdraft limit if they have one or go overdrawn if they don’t. Its intention is to give customers the peace of mind that payments will be met, putting them in control of their finances.

Its launch on 18 August will reduce charges and give customers certainty about when their payments will be met and when they will be bounced. For a single flat fee of £22, any customer who uses their Personal Reserve will have access to it for five working days. During this time a customer can use their Personal Reserve as many times as they wish and provided that they do not go beyond their Personal Reserve amount, payments will be honoured. Individual Personal Reserve amounts will be communicated to eligible customers between June and July. The average Personal Reserve amount will be £250.

Customers will only pay for their Personal Reserve if they use it and all existing customers will be given an opportunity to opt out of having a Personal Reserve on their account if they do not want one.

Mark Parsons, managing director of current accounts at Barclays, said: “Our customers wanted a simple, clear way of managing payments when they go beyond agreed limits. The Personal Reserve gives certainty about when payments will be paid and when they won’t, with just two simple, lower charges. Our new approach has been tested with consumers extensively over the last two years and we are confident that our products will promote account switching to Barclays.

“We are reaffirming our commitment to offering customers the choice of free in-credit banking if that is what they want. Increasingly we are finding that many customers are attracted by the extra benefits and services that are available on fee paying accounts. It is a matter of individual choice.”