The 2020 rules
Banks can no longer charge separate unauthorised overdraft fees. Any excess use is charged at the same interest rate as agreed overdraft use.
This was a major consumer protection change. Previously, unauthorised use could accrue very high daily fees.
Refused transactions
Banks can refuse to authorise a payment that would take you over your limit. Direct debits, standing orders, and card payments can all be declined.
Refused direct debits can trigger fees from the recipient (utility company, insurer, etc). They may also affect your relationship with those companies.
Repeated over-limit use
Persistent over-limit use is a risk signal to the bank. It can lead to: the overdraft being reduced or withdrawn, the account being flagged for review, or in extreme cases the account being closed.
It also affects your credit file if it leads to formal default.
What to do if you frequently exceed the limit
Request an increase if your income supports it and you use the overdraft responsibly.
If you cannot manage within the limit, this is often a sign that your overall finances need attention — a formal debt review might be worthwhile.
Regulated debt help specialists can help identify whether an overdraft is symptomatic of wider debt problems.