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Free-if-in-credit personal current accounts
Annexe C of Personal current accounts in the UK - an OFT market study
July 2008
OFT1005c
four million accounts incurred charges of over £200 in 2006, of which 1.4 million accounts incurred charges of over £500
FOR INFO _ see FSA meets with Banks to discuss Hardship conditions - 2nd July - Page 2 - Legal Beagles ---FSA Hardship
The average revenue per account of the seven largest banks ranged from £97 to £177 with an average of £152
For an ''average'' consumer, the annual cost of a current account ranges from £29 to £97.
The proportion of PCA revenue the seven largest banks generated from insufficient funds charges ranged from 24% to 54%
The percentage of accounts that were charged insufficient funds fees at least six times varies from 30 % to 50 % of those charged at least once.
12.6 million or 23% of accounts incurred insufficient funds charges in 2006. Insufficient funds charges revenue is derived entirely from these accounts, averaging £205 per account
The revenue generated from PCAs is used by banks to cover a range of costs. A range of retail banking products often share common costs.
The revenue from PCAs typically contributes to covering these common costs as well as the direct costs of providing PCAs.
Unarranged overdraft charges
The second largest source of revenue for banks is income from insufficient funds charges. These are of two main types: transaction charge and overdraft excess charge.
• Transaction charges are incurred at the time of the transaction and may be debited immediately (as they are incurred) or at a later date.
- A paid item charge is levied when the bank pays an item which creates or extends an unarranged overdraft.
An unpaid item charge is levied when the bank declines to pay an item that would, if paid, create or extend an unarranged overdraft.
• Overdraft excess charges are incurred at the time the account is in unarranged overdraft during a specified period, and are typically debited in the following charging period. There may be one per month or day.
39% of people who incurred at least ONE charge per year actually incurred MORE THAN SIX charges per year
Annexe C of Personal current accounts in the UK - an OFT market study
July 2008
OFT1005c
four million accounts incurred charges of over £200 in 2006, of which 1.4 million accounts incurred charges of over £500
FOR INFO _ see FSA meets with Banks to discuss Hardship conditions - 2nd July - Page 2 - Legal Beagles ---FSA Hardship
The average revenue per account of the seven largest banks ranged from £97 to £177 with an average of £152
For an ''average'' consumer, the annual cost of a current account ranges from £29 to £97.
The proportion of PCA revenue the seven largest banks generated from insufficient funds charges ranged from 24% to 54%
The percentage of accounts that were charged insufficient funds fees at least six times varies from 30 % to 50 % of those charged at least once.
12.6 million or 23% of accounts incurred insufficient funds charges in 2006. Insufficient funds charges revenue is derived entirely from these accounts, averaging £205 per account
The revenue generated from PCAs is used by banks to cover a range of costs. A range of retail banking products often share common costs.
The revenue from PCAs typically contributes to covering these common costs as well as the direct costs of providing PCAs.
Unarranged overdraft charges
The second largest source of revenue for banks is income from insufficient funds charges. These are of two main types: transaction charge and overdraft excess charge.
• Transaction charges are incurred at the time of the transaction and may be debited immediately (as they are incurred) or at a later date.
- A paid item charge is levied when the bank pays an item which creates or extends an unarranged overdraft.
An unpaid item charge is levied when the bank declines to pay an item that would, if paid, create or extend an unarranged overdraft.
• Overdraft excess charges are incurred at the time the account is in unarranged overdraft during a specified period, and are typically debited in the following charging period. There may be one per month or day.
39% of people who incurred at least ONE charge per year actually incurred MORE THAN SIX charges per year
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