A new survey has revealed that the average holder was charged £152 in bank fees last year which, if incurred by every one of the 65 million active current accounts in the UK, suggests banks made £9.9 billion from charges in 2017.
The research from Plum included 11,000 UK personal current accounts (PCA). The average £152 paid per year by current account holders includes overdrafts, foreign exchange, and transactions fees, as well other unspecified fees, such as monthly account charges. This £152 average rises significantly when considering personal current accounts with an overdraft function. In this case, total bank charges were closer to £221 per current account holder with those that have at least 1 overdraft transaction per year.
The bank charges listed in the survey include:
- 56% from overdrafts, including both planned and unplanned usage,
- 27% from ‘other’ charges, including monthly account fees, unspecified bank fees, or bank subscriptions,
- 11% from foreign exchange fees,
- 6% from late transaction fees
“We’re beginning to see the first applications of data deliver tangible benefits for consumers. From now on, users can take control of their data and, with AI, automatically realise savings,” Victor Trokoudes, CEO, Plum told PaymentEye.
“It is exactly why we launched our free Fee Fighter tool that enables consumers to see where they’re paying over the odds to banks and recoup savings. It marks the start of a revolution in the relationship between payment providers and consumers.”
With the implementation of Open Banking, in the coming months Plum hopes to go beyond raising awareness about hidden fees and provide solutions, helping users to identify smarter deals and more cost effective products with alternative providers bespoke to their financial requirements.
Read Victor Trokoudes on ‘Open Banking: A personal finance revolution’, exclusively for PaymentEye.
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