Cost of staying current is £1.3 billion, says Egg

12 September 2005
Bank charges for unauthorised overdrafts on current accounts have reached £1.3 billion since last year, says online bank Egg.

The survey found that UK consumers stray beyond their overdraft limit an average of four times a year due to poor money management. One in three believed they could manage their money more effectively by separating their bills from spending money.

Egg’s chief financial officer, Mark Nancarrow said: "Current accounts have become a melting pot for all of our money matters, but they do not give us an accurate picture of where we stand financially at any one time."

The report also found that 62 per cent are unaware of the balance of their current account at any given time while 58 per cent are not sure how much of their current account balance is actually available to spend. Coupled with the fact that a third of UK consumers are hit by bank charges of up to £100 every year, the cost of having a current account is rising, according to Egg.

Egg found that the confusion caused by debit card and direct debit usage caused people to spend money, forgetting that direct debits were yet to be deducted from their accounts.

APACS, the payments association, published a report this week revealing that debit card spending is on the increase.

An APACS spokesman said: "It appears there has been a shift in consumers paying for goods on credit to paying from their current accounts with money they already have. Maybe this is the start of more sensible lending."

Egg's report coincides with the launch of its new product, Egg Money, designed to help customers manage their money more effectively.

To compare current accounts, click here.

track© Adfero Ltd