/ Money

Too many of us are constantly overdrawn

Stack of two pound coins

The banks have rewritten Robin Hood’s famous mantra: taking billions in overdraft charges from the poor and giving to the rich. That can’t be right, can it? What’s worse is that 10% of us never get out of our overdraft.

Financial providers are creaming £105 billion a year in charges, such as overdraft fees on current accounts and management fees on investments.

This equates to one million pounds a minute. No wonder banks can afford to shell out such massive bonuses.

What makes matters worse is that many investors won’t get the returns they hoped for, and as for savers, well, how much is your account paying in interest? Peanuts, and should you go into the red your meagre interest earnings are not only wiped out, but you’re landed with a charge that far outstrips what you’d have hoped to earn on your account in the first place.

Our unfair overdraft charges campaign

It’s estimated that one in ten of us never get out of our account’s overdraft. While more than a third of all account holders have dipped into their overdrafts at some stage over the past year. And then there are those of us who enter the murky world of unauthorised overdrafts, where the fees really sting.

Which? has a longstanding campaign on overdraft charges, but it really needs more support from account holders like you.

The best starting point for anyone who feels that the banks are treating their customers unfairly is to email your MP. Ask them to add their voice to the call for an end to unfair bank charges.

If enough people make a big enough noise, the banks will surely have to take note, won’t they?


I totally agree that far too many live on an overdraft – I put this down to Thatcher selling off Council Housing at a discount (effectively giving government approval to massive home loans) – then refusing the Councils permission to use the receipts to build more housing.
This meant that many were able to make an ‘instant’ profit when re-selling the houses. Banks were very irresponsible in loaning the mortgages – eventually leading to the credit crunch. It was at this time that any form of credit became far too easy to obtain – encouraging many to borrow too much.

I was brought up to live within my means – which meant I saved up to buy large items. I was appalled at the ease that one .was able to borrow from Banks over the phone without investigation..

I’m sorry overdraft charges are only unfair if the condition of the overdraft is unknown – and that is not the case. One is expected to read the conditions of the overdraft – and it is one’s own responsibility to ensure that one does not overspend. So any charges are self induced. Banks are there to make profits for their shareholders not their customers.

David Finch says:
14 May 2011

I am sorry but I have to disagree with your comment.
I was injured at work, an accident that was not my fault but my employers.
I went from a very well paid job and the lifestyle that brings to living on a DWP Disability pension and Incapacity benefit. I informed my bank of the injury and major spinal surgery in July of 2008 when it became apparent I would not be returning to work.
Since March 2008 my bank HSBC had charged me literally £1 for every £1 I go overdrawn. This is a penalty charge not a disincentive. Despite numerous letters to HSBC they are still charging me this outrageous rate. I have never gone more than £100 overdrawn and it is always caused by the fact the DWP and all other benefits pay every 2 weeks, my bills still come at the beginning of the month.
I must however be managing my expenses or the overdraft would get worse, which it has not.

I sorry to hear of your disability – and think your Bank is treating you shabbily – but in all honesty I would change Banks – as other Banks have better overdraft facilities. First Direct has a free £250 overdraft facility – except of course you must have around £1000 balance in your account at the start of each month.

I know that £100 overdrawn is not much – but is there any way to reduce your expenditure by £100 for 1 month only as it appears that if the overdraft is not worsening then your expenditure is balanced by income.

Let’s shame these bankers for once and for all I’m sick of struggling with hsbc and being charged £5 per day even if I’m 1pence overdrawn and they won’t give me a overdraft so me and my struggling family and you the uk public are being robbed whilst these big wig bankers are claiming millions in bonuses That makes me feel sick