Bank charges push over half of bank customers into unauthorised overdrafts

Published on 30 November 2016 by Raffick Marday

Bank charges push over half of bank customers into unauthorised overdrafts

New research has revealed that the finances of many a cash-strapped bank customer are taking a hit, with bank charges affecting millions of people across the UK.

According to the study, which was published by budget account provider thinkmoney, 42% of current account holders have shelled out for bank charges in the past. Of these, over half (57%) have fallen into an unauthorised overdraft as a result.

The average amount paid in charges over the past year stands at £46.84. However, a third of those subjected to bank charges have paid more than £50 over that time period, while one in six has paid over £100.

Ian Williams, head of PR and communications at thinkmoney, said: “Although 58% of those questioned have never paid bank charges, more than four in ten have - and many of those have experienced further problems as a direct result.”

Affecting 20% of bank customers, unauthorised overdraft fees are the most common bank charges. Unauthorised overdraft daily charges (15%) and overdraft warning letters from the bank (14%) also made it into the top three.

Bounced direct debits (13%), unpaid standing orders (8%) and bounced cheques (6%) also accounted for some of the most common bank charges.

The research suggested that a lack of awareness might be behind the additional charges: 5% of those with a current account, which is equivalent to around 2.3 million people, don’t actually know whether they have ever been charged by their bank.

In addition, 3% of those who have been charged in the past 12 months don’t know how much it has cost them.

"People who have lost lots of money through bank charges should be aware that there are alternatives available,” Mr Williams added.

Comparing bank accounts to ensure you get the best deal to suit your personal circumstances is a good starting point. Be sure to check overdraft fees before making a decision!

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