A debt charity is calling for a clamp down on exorbitant charges for people who fall into debt

The UK's poorest bank users are providing a third of the financial bodies' profits, a report has found.

A study by the Financial Conduct Authority (FCA) has shown up to half of the profits made by big banks from current accounts come from just one in 10 customers.

Charity StepChange has said the findings prove that reform is needed to overdraft charges to protect vulnerable consumers.

A recent FCA report revealed that more than three million people have dipped into an unauthorised overdraft in the course of a year, however the majority of unarranged overdraft charges are concentrated on less than 2% of customers.

The report concluded that a small proportion of people pay significantly more than others in overdraft fees, and the regulator is considering clamping down on the fees that banks can charge.

Peter Tutton, head of policy at StepChange Debt Charity, said that about half of the people the charity supports have overdraft balances, which can often see consumers face higher rates of credit than payday loans.

He said: "The FCA recognises the majority of unarranged overdraft charges are concentrated on just 2% of current account holders, and unarranged overdrafts are more likely to be incurred by vulnerable consumers.

"We strongly support the proposals in the FCA’s current consultation on overdrafts that firms should stop charging unauthorised overdraft fees and offer more help to people trapped in persistent overdraft debt. If implemented, these will help to significantly reduce the harm felt by people trapped in what can be a very high cost form of credit."