Updated: Oct 15
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PayPal is set to introduce an annual fee of up to £12 for users whose accounts have been inactive for a year or more – but you can avoid the charge by logging into your account before the deadline in December.
From 16 December 2020, PayPal users will be charged the fee if their accounts have been inactive for at least 12 consecutive months.
PayPal defines "inactive" as an account where the user hasn't sent, received or withdrawn money, or logged into their account.
If your account has been inactive for over 12 months, the fee you're charged will be the lesser of £12 or your entire PayPal balance. If you don't have any money in your PayPal account, or your balance is negative, PayPal says you won't be charged a fee (even if you have a credit or debit card linked to the account).
You can avoid being charged by logging into your PayPal account (or making a transaction) on or before 15 December 2020, before the fee is introduced on 16 December 2020.
How can I avoid the fee?
If you have a PayPal account but don't regularly use it, you can avoid the fee by simply logging into your account on or before 15 December 2020.
This means you will have been "active" in the previous 12 months, so won't be charged.
At this point, if you don't use your PayPal account and don't want to risk being charged in future, you can simply close the account (once you're logged in, go to 'Settings' and select 'Close your account' at the bottom of the 'Account' tab).
You can also keep the account open but transfer any money you have there into another account, as you won't be charged in future if your PayPal account doesn't have a balance. PayPal says it has no plans to close inactive accounts which don't have balances.
If you're an irregular PayPal user but still want to keep your account open and hold a PayPal balance, it could be worth adding a note to your diary on a certain date every year reminding you to log in to your account. This will ensure you're not charged the fee in future.
PayPal also says it will warn inactive customers that they could need to pay a fee, by sending them notifications 60 days, 30 days and then seven days before the fee is set to be charged.