According to a new report by thinkmoney, 42% of current account holders in the UK have paid charges due to their bank refusing to honour a payment because they did not have sufficient funds.

Most basic bank and current account providers charge for this, with some demanding as much as £25.

However, bill issuers also charge for a missed payment, racking up yet more costs for the consumer.

According to the report, loan and credit card providers typically charge £12.

Missed payments can also result in consumers missing out on any promotional rates they had, such as a 0% balance transfer offer, potentially adding hundreds of pounds in interest charges to bills.

Mobile phone providers, utility firms and pay TV companies can also charge interest and reserve the right to add unspecified ‘admin charges’, while others may limit their service.

The report found that some utility providers will allow you a couple of missed payments but will then cancel your direct debit and you may have to return to a more expensive tariff.

Ian Williams of thinkmoney said: “Missed payments can end up costing you a lot more than you realise. Although many people are aware that a bank will charge you for returned payments, charges made by the company itself can often prove to be an unwelcome surprise, as can losing access to their services and losing promotional rates or good deals.

“If paying your monthly outgoings on time is something you struggle with, having someone to ensure all your bills are paid on time each and every month could be ideal.”

Missed payments can also leave a negative footprint on credit reports and therefore damage peoples’ credit rating.

This could potentially make it harder to get credit in the future, or make credit more expensive.

A selection of bill issuers and what they charge

 source: thinkmoney