unarranged

The FCA's evaluation of its own new rules found each customer who had an arranged overdraft or access to an unarranged overdraft saved, on average, £17.40 in charges in 2021 due to the new pricing rules.

The policy was designed to help the 14 million people who suffered most because they slipped into unarranged overdrafts, without getting authorisation in advance from the bank, and paid much higher charges.

But the FCA decided charges were too high and too confusing so it banned treating people with unarranged overdrafts differently and it banned daily or monthly charges.

Lenders had made £2.4bn in revenue from overdrafts in 2017 - around a third of which was from unarranged overdraft fees and charges - before the changes were made.

"The action we took to simplify overdraft charges and to tackle high unarranged overdraft fees has saved people across the UK almost £1 billion in total," said Sheldon Mills, from the FCA.