Added overdraft rates ‘costing Brits £52m’

Figures from the price comparison firm show authorised overdraft charges have been increased by an average of 0.93 per cent over the course of the last six months and could be making debt management problems worse for consumers across the country.

Meanwhile, bank and building societies in the UK have increased the rates of interest they pay customers whose current accounts are in credit by an average of only 0.02 per cent, the new study reveals.

“These banks have been very sneaky by just increasing overdraft rates and not the in-credit rates and we are pretty certain that the other banks will follow this trend by the end of the year,” said uSwitch.com’s Mike Naylor.

“Consumers are typically charged interest in double-digits for using authorised overdrafts and the recent barrage of increases will certainly hit them in the pocket,” he added.

Figures from the Insolvency Service have shown that more than 30,000 people in the UK entered an Individual Voluntary Arrangement by way of a debt solution during the first three months of this year.