You are here: Home - Saving & Banking - News -

Consumers lose millions in bank charges

0
Written by:
16/01/2006

The bank accounts of UK consumers suffered losses to the tune of £553m in 2005, resulting in calls for people to monitor their finances more closely. Pauline McCallion reportsThis figure seems colossal and brings to mind recent reports of card skimming or identity fraud. However, it is not a result of financial theft but actually down to penalty fees and charges for late payments on credit cards and loans. So it seems consumers only have themselves to blame. Sean Gardner, chief executive of MoneyExpert.com – who carried out the study with financial research firm Defaqto – branded the figure “staggering” and attributed it to busy lifestyles with no room for financial planning.

The main contributors to the bill were penalties such as late payment fees on credit cards, overdraft charges, mortgage application fees, early redemption penalties on loans and cashing in savings accounts early, according to the research.

David Lee, research director at Defaqto, says: “The high level of penalty fees paid out in the past 12 months shows there is a real need for financial education. Many of us end up paying fees because we fail to understand the terms and conditions of the products we take out.”

The research found 38% of adults aged 18 and over plan to review their finances in 2006, after an average of £70.70 was paid out in fees last year by 7.8 million people. Approximately 11% of people paid charges for credit cards while 9% paid fees on current accounts. Mortgages, savings and loan penalties were paid by 1% of UK consumers each.

Gardner adds: “It is difficult for many time-pressured people to make the most of their money, research financial products and ensure they don’t fall foul of a minefield of costs and charges levied by providers. In our experience, many customers are crying out for a helping hand through the complex world of personal finance.”

 

Tagged:

Tag Box

Debt

Pension

Spending

Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
Lessons in money for teenagers

School children are set to be taught about money management following the launch of two new certificates from the Institute...

Close