Banking costs highest ever

Banks and building societies are charging their customers more and more, according to findings from the Bank of England. Customers, on average, are being charged at a rate of 19.1 per cent.

The Bank of England has said that these are the highest rates that have been seen since records were first taken back in 1995. Some financial experts say that many lenders have been restructuring the accounts that are currently in place, as well as cutting many of the best deals that they offer as they do this. Several providers were reported to have increased their rates over the past month.

According to Michelle Slade of Moneyfacts.co.uk, “Overdrafts customers are an easy target” for many banks and other financial institutions. And with many people making use of an overdraft every month, many customers may be being charged much more than in the past.

Findings from Moneyfacts.co.uk also show that over 25 per cent of bank accounts that are currently in use have had increases in their overdraft rate, even though the bank rate has not changed.

Rates for credit cards are remaining at a high level, with lenders charging about 17 per cent interest. Still, not all rates have risen. Mortgage rates have seen a recent decrease, and some tracker deals for anyone with a 25 per cent deposit have fallen to as low as 3.55 per cent.

Some deals also got cheaper, with five-year fixed rate deals dropping about 0.25 per cent to 5.1 per cent. These loans have been reducing in cost for nine months in a row now.  Unfortunately for some people, however, those with a deposit account may notice a decrease in returns for their accounts.

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