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Current account customers handed over an average of £152 each in banking fees last year,
effectively putting an end to the myth of free banking.
Foreign usage, monthly account fees, overdraft costs and charges for bounced payments
were all included within the average cost.
Given there are around 65 million active current accounts in the UK, this means the banks
could have made nearly £10 billion in fees, according to the figures from savings app Plum.
The research, which looked at 11,217 current accounts, showed that only 7 per cent (770
users) paid no bank fees at all.
Bill shock: Banks slap customers with hefty fees for borrowing and use abroad
Overdraft fees
Over half (57 per cent) of the £152 average annual cost to current account customers came
from using an overdraft and 56 per cent of account holders, or 6,276 people, used their
overdraft, dipping in to the red at least once in the year.
The average fees paid by just those who use their overdraft was much higher £221, on
average according to Plum.
Overdraft costs vary dramatically, but some - including NatWest and TSB charge monthly
fees of up to £6 with interest of up to 20 per cent loaded on top.
Flat-rate daily fees have also become popular.
Halifax, for example, charges 1p per £7 borrowed and Santander applies a daily fee of up to
£3 depending on the amount you borrow.
Packaged accounts
Paid-for packaged current accounts that usually come with insurance can be a cost effective
way of buying insurance, with many bundling mobile, travel and breakdown cover into one
monthly account fee.
But many people have been mis-sold these accounts in the past and could be paying for
'perks' they don't need or can't use. So make sure to check your statement. You can find out
more about how to reclaim fees for mis-sold accounts in our guide here .
Unexpected borrowing can cost even more. For example, First Direct and Barclays both
charge £5 per day.
Add-ons
The next largest slice of the £152 average fee (at 27 per cent) was made up of monthly
account charges or unspecified fees - which can include the cost of payments made or
bounced by the bank that take you beyond your limit that are are commonly known as paid
and unpaid item or transaction fees.
These payments typically cost between £5 and £10 each.
Some of the worst offenders include Post Office, which applies an even higher £15 unpaid
item fee, while Metro Bank charges £10.
Over the course of the year, some customers shelled out as much as £75 in total for paid
and unpaid items, according to Plum.
Chat bot: Plum works out how much cash it can sweep into a savings pot for you
And around a quarter of the total charges (approximately £41) came from more general
charges such as any insurance add-ons, according the the research.
Foreign exchange fees made up 11 per cent of the fees slapped on current account
customers, setting the average person back by £16 per year.
Finally the cost of cost of late payments accounted for 6 per cent.
Use the Fee Fighter tool to find out how much you have paid your bank
How much did your bank pocket?
Plum already offers an AI-powered savings tool that uses read-only access to your accounts
to assess how much money you can safely save.