Saving & Banking

Consumers hit with £300 million in unarranged overdraft fees last year

According to, on average consumers are charged £33 each time they overspend, but for 5% of those affected the fees exceed £100 – even though the average they were overdrawn by was  £60.

Most consumers will incur unarranged overdraft fees when they spend beyond their agreed overdraft limit.

The most common reasons given for people slipping beyond their account limit are paying household bills (24%) and the weekly grocery shop (10%).

In an attempt to recoup the fees, almost half (46%) have called their bank to complain. While nearly two-thirds (62%) were successful in getting a refund on the charges, nearly half of those who called their bank were told the fees would only be waived the once. Just a fifth of complainants were offered options such as balance reminders or text alerts, to prevent them incurring further charges in the future.

Over half (53%) of consumers would rather be left red-faced at the counter by having their card declined than incur a fee as a result of slipping into an unarranged overdraft and two-thirds (67%) think banks should let customers turn off their unauthorised overdraft facility

Yet this isn’t currently standard practice, with over a quarter of those who contacted their bank being told they were unable to deactivate their unarranged overdraft. A further quarter of consumers didn’t know that this was even an option at all. is calling on all banks to offer every customer the ability to opt out of their unarranged overdraft, so they can avoid these costly charges and better manage their finances.

Tom Lyon, money expert at, said: “Banks are raking in millions every year from unarranged overdrafts and failing to do everything they can to prevent customers from dipping deeper into the red.

“Consent and, ultimately, control over finances needs to be in the hands of consumers. Yet, too many are in the dark about whether they can turn off their unarranged overdraft facility and avoid these extortionate fees. If consumers would rather have their card declined at the checkout than be stung by sky-high fees, they should be given the option to do so.

“We urge banks to offer every customer the option to deactivate their unarranged overdraft. In the meantime, customers should contact their bank and set up text alerts for when their account balance is low, so they can take action before drifting into an unarranged overdraft. Overdraft costs vary widely between banks, so it also pays to compare all the options available to you and switch if you find a better deal.”

The cost of an unarranged overdraft

Bank current account Term used to describe unarranged overdrafts Cost of slipping into an unarranged overdraft by more than £25 in a month
    3 days 5 days 10 days
Lloyds – Classic account Unplanned overdraft £30* £50* £80*
Bank of Scotland – Classic account Unplanned overdraft £30* £50* £80*
TSB – Classic plus account* Unarranged overdraft £30* £50* £80*
Co-op bank – Current account Informal overdraft £30** £50** £60**
Santander – 1|2|3 Current account Unarranged overdraft £18 £30 £60
NatWest – Select bank account Unarranged overdraft £18 £30 £60
RBS – Select account Unarranged overdraft £18 £30 £60
First Direct – Current account Informal overdraft £15 £25 £50
Halifax – Reward current account Unplanned overdraft £15 £25 £50
HSBC – Advance bank account Informal overdraft £15 £25 £50
Nationwide – FlexPlus account Unarranged overdraft £15 £25 £50
Barclays – Barclays bank account** Emergency borrowing £15 £25 £35

* + £6 monthly overdraft usage fee

** fees only apply if you are in your unarranged overdraft for more than 6 business days and haven’t been in your unarranged overdraft for the past 12 months. All charges are capped at £60 a quarter.

*** fee capped at 7 days

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