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The Co-operative Bank freezes overdraft charges

The Co-operative Bank freezes overdraft charges

Category: Banking

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
The Co-operative Bank has revealed it is to remove interest charges on agreed overdrafts for the next three months.

The bank said it was 'a unique move within the banking industry' which would provide some extra financial relief for customers.

Under the deal a current account customer who has an agreed £2,000 overdraft could save £75 in fees throughout the three months.

Customers with a £1,000 overdraft could save just over £37 during the period.

The initiative comes on the back of new figures that show the average British adult accumulated just over £749 of debt last year, and the number of people amassing debt increased by 27% last year, compared with the previous year.

Robin Taylor, head of banking at the bank, said the move – which will last until April – would help customers who have been left struggling after an expensive festive period.

"This move again highlights how we are looking to bring some much needed competition to the high street, by providing customers with a genuine alternative to the big five banks," he added.

Figures show that just over a quarter (27%) of Britons who accumulated debt in 2011 actually expect to pay back all of their previous year's debt in the next 12 months, with an additional quarter expecting to pay back half or more (26%).

However, just under a third of consumers (29%) expect to pay back less than half and just over one in ten (12%) don't believe they will be paying any of their 2011 debts off this year.

The research also shows which forms of borrowing people have used over the last year, with the most common, including credit cards (58%), personal loans (20%) and arranged overdrafts (16%).

Just under one in fifteen (7%) used store cards and 5% took out payday loans.

"Many people review their finances at the start of the year," Mr Taylor added.

"As a responsible lender, we want to encourage customers to take control of their finances by providing them with the additional leeway to begin tackling any debts."

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