More than a third of Britons (37 per cent) are surprised when they discover they have gone overdrawn, according to a new study.

The survey by Nationwide Building Society found that one in five account holders who have not got an agreed overdraft facility with their current account provider admit to going overdrawn.

Nationwide warns that without an agreed overdraft, going overdrawn can be very costly.

Customers will generally be charged a higher rate of interest and incur a fee of almost £30. Nationwide explains that being overdrawn by £500 for just one month could cost as much as £32.30 if unauthorised, yet as little as just £2.73 with an authorised rate.

The survey also showed that seven out of ten people in the UK have an overdraft, but over two-thirds of overdraft users do not know what rate of interest they pay when they are overdrawn.

An estimated 22 per cent of people think that overdrafts are too complicated to set up and almost 50 per cent believe that they would be charged a fee when setting up an overdraft, yet with most high street providers this service is free.

Steve Clode, Nationwide’s marketing director, said: “Going overdrawn when you don’t have an arranged overdraft can be extremely expensive. Setting up an overdraft is a sensible precaution, even for people who don’t ever intend to go overdrawn. None of us know what unexpected expenses are just around the corner.”