Daily Junction.mobi portalPersonal Finance · May 1, 2026 · Rachel Stone · 5 min
A practical guide to the most common UK bank fees, from overdraft charges to overseas spending and packaged accounts, and the simple steps that help you avoid paying them.
Banking is mostly free in the UK, which makes the charges that do exist all the more annoying — especially because most are avoidable once you know where they hide. This guide walks through the common ones and the simple habits that keep your money in your account. This is general information, not financial advice.
Bank fees are charges your bank or card provider applies for certain services, borrowing or transactions. Everyday current accounts in the UK are typically free to run, so most fees come from specific situations: borrowing through an overdraft, spending abroad, paying for a bundled account, or slipping up on a payment.
The good news is that almost all of them can be sidestepped with a little awareness. The three that catch most people are overdraft charges, overseas spending fees, and packaged account fees, so we will take those in turn before rounding up the smaller ones.
An overdraft lets you spend more than you have in your account, and that borrowing is not free.
The cleanest way to avoid overdraft costs is simply to stay within your balance. A few habits make that easier:
Set up low-balance text or app alerts, keep a small buffer in the account, and line up your bill payment dates with your payday so money is not taken before your wages land.
If you find you rely on an overdraft most months, that is a signal worth acting on rather than absorbing. An overdraft is a form of borrowing, and our guide to how overdrafts work and what they cost explains the options, while building even a small emergency fund can keep you out of the red in the first place.
Using your normal card abroad can quietly cost you on every transaction.
Many debit and credit cards add a non-sterling transaction fee — a percentage added whenever you spend in a foreign currency, whether in person or online with an overseas retailer. Some also charge a fee for cash withdrawals at foreign ATMs, sometimes on top of interest if it is a credit card.
How to avoid it:
For a trip, pairing the right card with sensible cover matters too; our overview of what travel insurance covers is a useful companion when planning the money side of going abroad.
A packaged (or premium) bank account charges a monthly fee in return for bundled extras — typically things like travel insurance, mobile phone cover, breakdown cover or preferential rates.
These accounts are not automatically bad. The question is whether the maths works for you:
| Packaged account is good value when... | Packaged account is poor value when... |
|---|---|
| You use most of the bundled benefits | You rarely or never use the extras |
| The bundle is cheaper than buying separately | You already have the cover elsewhere |
| The included cover suits your circumstances | The cover excludes you (e.g. age or health limits on travel insurance) |
The trap is paying a monthly fee for benefits you do not use or that duplicate cover you already have — for example travel insurance through another policy, or breakdown cover bundled with your car. It is worth reviewing a packaged account once a year against what you actually need. If the extras do not earn their keep, switching to a free account saves the fee outright.
Beyond the big three, a handful of charges crop up:
None of these is large on its own, but they are all avoidable with a little attention.
Fees are not always your fault, and you have options:
Most UK bank fees are avoidable once you know where they come from. Stay within your balance to dodge overdraft charges, use a travel-friendly card and pay in local currency abroad, and only keep a packaged account if you genuinely use its extras. Watch for the smaller failed-payment and admin fees, review your accounts once a year, and if you are ever charged unfairly, complain — and escalate to the Financial Ombudsman Service if needed.
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