Money Wellness
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category icondebts
calendar icon12 Apr 2024

Brits spend £1.4 billion a year on overdrafts

9.7 million current account customers are overdrawn by an average of £697, totalling £1.4 billion spent on bank overdrafts a year, research by TotallyMoney finds.

Taking the average balance, and a typical rate of 39.9%, TotallyMoney states that a customer would pay £278 in overdraft interest each year. This means the average overdrawn borrower will pay a £278 in interest per year to a bank charging 39.9%.

Meanwhile, those spending an average of 20 days being £1,000 overdrawn, will pay £262.3 in interest.  Bank of England data shows that the effective overdraft rate has increased by 2.07%- from 20.85% to 22.92%-meaning it’s becoming an increasingly expensive way to borrow.

TotallyMoney CEO, Alastair Douglas said “For some, overdrafts are a ghost debt — there’s no separate card, account, or app — and if you’ve been with your bank for years, you might not remember ever applying for one. That means you might not even really notice if you’re using it, especially if you don’t regularly check your bank statements. But the truth is, overdrafts are credit products, and just like a loan or a card.

“So you must treat it like any other form of borrowing, use it responsibly, and keep an eye out for cheaper and better alternatives. You might not realise it, but some high street banks are charging overdraft customers almost 40% interest, making them one of the most expensive mainstream ways to borrow. By avoiding expensive overdraft fees, you’ll be able to get out of debt quicker, save money and start moving forwards. Whether that means having more money to spend on yourself each month, or saving for a rainy day, you’ll be unlocking a life of more choices.”

 Struggling with your debts?

Our free debt advice is available to people all over the UK, online or over the phone. We’ll go through your finances in detail and explain your options. You might be surprised at the range of help available. We can: 

  • check you’re getting all the benefits you’re entitled to
  • help you with budgeting
  • advise you on debt solutions

 There are various debt solutions available that reduce your monthly debt repayments and even write off some of your debt. We’ll let you know if any of them are suitable for you. All our advice is free. Some debt solutions are free, while others come with a fee. We’ll give you all the information you need to make an informed decision and, if we recommend a debt solution and you decide to go ahead, we’ll help get it set up.

You can read our guide for more details before getting in touch if you’d like.



Avatar of Lydia Bell-Jones

Lydia Bell-Jones

With a background in banking, Lydia has been writing professionally for over five years. She is passionate about helping people improve their personal finances and has a particular interest in the connection between money and mental health.

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