StepChange Debt Charity response to Which? research on overdrafts
8 February 2017
In response to Which? research showing that unauthorised overdrafts can cost more than payday loans, Mike O’Connor, Chief Executive at StepChange Debt Charity, said:
“This research shows some of the serious problems that overdrafts can cause and further highlights the need for urgent action. Every day we help people who have regularly exceeded their overdraft limit and been hit with extra fees and charges. This has made getting back on track the next month an even more difficult challenge.
“Our latest research shows that 2.7 million people a year now use overdrafts just to meet everyday expenses. Without action, hundreds of thousands of people risk being stuck in a borrowing cycle, trapped by spiralling fees incurred through just trying to make ends meet. The time has come for the FCA to cap unarranged overdraft charges and look at the widespread problem of persistent overdraft debt.”
Statistics from StepChange Debt Charity survey of clients with overdrafts
- 62% went over their limit and did so in five of the previous 12 months on average
- They paid an average of £45 a time in charges, or up to £225 a year
StepChange Debt Charity statistics on overdrafts from the first half of 2016
- 52.8% of people coming to StepChange Debt Charity had overdraft debt
- On average, they owed £1,679
Notes to Editors
- Total sample size was 3,204 adults. Fieldwork was undertaken between 15th-19th December 2016. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+). Figures have been grossed up, using the ONS 2015 Mid-Year estimates of adults in Great Britain: 49,921,573. Calculations have been undertaken by StepChange Debt Charity based on YouGov figures.
- StepChange Debt Charity carried out a survey of 1,019 clients with overdrafts in September-October 2016.