For immediate release
Two in three don’t understand overdraft fees as borrowing tops £9.4 billion
- One in four Brits (25 percent) dipped into the red over the past 12 months
- The average amount overdrawn was £721
- Men borrow £166 more than women each year
- Scots and Londoners are most likely to be overdrawn
04 July 2018- Two thirds (68%) of those with an overdraft have no idea how much it’s costing them, according to research by personal finance comparison website finder.com .
And with a quarter (25%) of Brits going into their overdraft during the past 12 months, this means almost 8.9 million people are potentially being hit by fees they aren’t aware of or don’t understand. An additional 725,000 consumers aren’t even sure whether they have gone into the red or not.
The average amount people borrowed from their overdraft last year was £721, putting Britain’s overdraft debt at more than £9.4 billion over the past 12 months. While a similar number of men and women take out overdrafts, men are the biggest borrowers, spending £166 more on average than women in the past year (£808 vs £642).
Regionally, Scotland and London have the highest proportion of people dipping into their overdraft, as almost a third of residents were overdrawn (31% and 30% respectively) last year. This was closely followed by Yorkshire and the Humber (29%), while the lowest proportion of people going overdrawn was in East Anglia (18 percent).
Calorie estimations on a selection of alcoholic drinks
|Yorkshire and the Humber||29%|
Perhaps unsurprisingly, people aged between 18 and 34 are much more likely to borrow from their overdraft. Two in five (40 percent) did so at some point last year, more than three times the figure for those aged 55 and over (13 percent). Younger people are also likely to borrow more than their older counterparts at an average of £863.70 each, compared to £485.45.
To view the full results of the research, complete with an interactive map of the number of overdrafts per region, please visit: www.finder.com/uk/overdraft-fees
Commenting on the findings, Jon Ostler, UK CEO at finder.com, said: ‘‘Although the Financial Conduct Authority is looking to regulate overdraft fees and enforce greater transparency, it is very concerning to see many consumers continue to pay fees unwittingly. Daily charges for unarranged overdrafts are typically between £5 and £8 so, with additional interest and monthly charges on top, it can add up quickly.
When considering borrowing money it’s worth looking at all your options. Banks are now required to send a notification if you’re about to go into the red, however many still come with excessive fees and can rack up debt easily. If borrowing money is unavoidable, consider taking out a personal loan from friends or family, or a zero percent credit card so you know exactly how much you owe at any given time. As with any debt, it is important to set yourself a budget and plan to pay it off in order to avoid accumulating more fees.”
Notes to editors:
- Finder.com commissioned Onepoll to carry out a nationally representative survey of adults aged 18+.
- A total of 2,477 people were questioned throughout Great Britain, with representative quotas for gender, age and region.
- The research was conducted between 8 and 13 June 2018.
- Jon Ostler, CEO (UK) at finder.com is available for comment, opinion or interview regarding the research.
The information in this release is accurate as of the date published, but rates, fees and other product features may have changed. Please see updated product information on finder.com's review pages for the current correct values.
finder.com is a personal finance website, which helps consumers compare products online so they can make better informed decisions. Consumers can visit the website to compare utilities, mortgages, credit cards, insurance products, shopping voucher codes, and so much more before choosing the option that best suits their needs.
Best of all, finder.com is completely free to use. We’re not a bank or insurer, nor are we owned by one, and we are not a product issuer or a credit provider. We’re not affiliated with any one institution or outlet, so it’s genuine advice from a team of experts who care about helping you find better.
finder.com launched in the UK in February 2017 and is privately owned and self-funded by two Australian entrepreneurs – Fred Schebesta and Frank Restuccia – who successfully grew finder.com.au to be Australia's most visited personal finance website (Source: Experian Hitwise).