He ended the third round level on 217 with the overnight leader Liam Higgins, Ireland's new Senior champion.
'I'm surprised,' said Charles after Higgins had lost a six-stroke lead on the field in the final nine holes. 'But this is one of the world's great golf courses, and if you get into trouble here, you make bogeys.'
Charles sank a 5ft putt - one of only two single putts in his round - to make a birdie three at the 13th in an inward half of 35 for a par round of 71.
In contrast Higgins needed 43 strokes to come home. His misfortunes began at the 10th where his second shot finished beside a sprinkler head just off the green.
He then was unlucky with a five iron which found a bunker at the short 12th and cost him a stroke. Wayward drives proved expensive at the 14th, 15th, and 17th, and he completed the catalogue of disasters by driving into the trees at the 18th and carding a final humiliating six.
Now he and Charles are a stroke ahead of Royal Jersey's Tommy Horton and the Chicago amateur Joel Hirsch.
Gary Player, the South African trying to add a ninth major senior title to the nine he has won on the regular tour, is a shot further back with England's Fred Boobyer and Ireland's Norman Drew. 'I'm playing poorly. I used five different swings out there today,' Player said after his round.
The day's saddest tale was told by the Royal Mid-Surrey professional David Talbot. He was out in 33, two under par, and recorded pars at the next four holes. However, big trouble awaited him at the 14th.
His drive stopped on top of a bunker. Unable to take a proper stance, he tried to chop it on to the fareway, but succeeded only in clipping the top of the ball.
It jumped up and struck his leg, earning him a two-stroke penalty. Then it rolled into the bunker.
He wedged out, knocked a five iron left of the green, chipped on and missed the putt, finishing with a five over par nine.
'You think at this time of life everything's happened to you,' he said after completing a 74, 'but that's a new one for me.'
SENIOR BRITISH OPEN (Lytham and St Annes) Leading third-round scores (GB or Irl unless stated): 217 B Charles (NZ) 73 73 71; L Higgins 70 71 76. 218 * T Horton 73 72 73; J Hirsch (US) 73 71 74. 219 N Drew 73 73 73; F Boobyer 74 73 72; G Player (SA) 73 74 72. 220 B Huggett 72 73 75. 221 B Zimmerman (US) 69 77 75; D Snell 74 78 69; A Grubb 77 73 71; H Inggs (SA) 72 77 72; C O'Connor 72 77 72. 222 A Proctor (US) 73 76 72; J-M Roca (Sp) 75 72 75; H Muscroft 72 76 74. 224 V Tshabalala (SA) 77 75 72; A Palmer (US) 73 76 75; J Fourie (SA) 72 77 75; L Laoretti (US) 75 71 78; A Skerritt 73 77 74. 225 R Terry (US) 75 79 71; * B Waites 77 75 73; * C Green 72 78 75; J Stahl (US) 74 75 76. * denotes amateur.Reuse content