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Be prepared for unexpected banking charges

Be prepared for unexpected banking charges

Category: Banking

Updated: 12/04/2017
First Published: 04/02/2014

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

When consumers entrust their hard-earned cash with a bank or building society they would usually hope it to be safely stored until needed, but instead many are losing out due to bank charges.

In fact, 28% of bank and building society users surveyed have paid charges over the last year, according to the latest research from thinkmoney.

Overdraft fees seem to be the biggest culprit. 63% of those who were charged found themselves paying fees for authorised use of their overdraft, with such fees being a growing but controversial trend over the years.

Unauthorised overdrafts are also catching people out with 44.1% finding themselves paying arrangement fees, 26.8% being stung with daily charges and 24.2% of people being charged for cheques and direct debits bouncing as well as unpaid standing orders.

These fees have lead some customers (55.9%) into a vicious circle, pushing them into an unauthorised overdraft and therefore subjecting them to more fees, with over a quarter receiving five or more charges in the year.

Ian Williams of thinkmoney says:

"Unexpected bank charges can make it incredibly difficult for customers to manage their money. And our research shows that a quarter of Brits had to pay sums of up to £500 last year, which could have put some of their finances in a perilous situation."

So, if you've been caught out and want to avoid further charges, what can you do?

  • Regularly check the amount you have in your account and plan for anything that is likely to be paid out, keeping track of direct debits, cheques and other payments.
  • Compare current accounts and read the small print to compare charges.
  • Take a look at our savings accounts and budget for unexpected costs.

The key is to be prepared, ideally ensuring you don't suffer unexpected charges in the future.

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.