Study finds 10% of Britons permanently in the red
Wednesday, 24 February 2010 10:50
By myfinances.co.uk staff
Some ten per cent of British adults, around five million people, are permanently overdrawn on their bank account.
Figures published by moneysupermarket.com show that a further 12% dipped into the red five or more times over the past 12 months.
Overall, the comparison site said 38 per cent of Britons had used their overdraft in the last year.
The report marks an improvement on 2009, when moneysupermarket.com found that 17% of adults were permanently overdrawn, 15% were in the red more than five times in 12 months and 52% had used their overdraft at least once.
Kevin Mountford, head of banking at moneysupermarket.com, said: "While it is encouraging to see less and less people reliant on their overdrafts, we should be concerned that there are still such a large number of people permanently overdrawn."
He added that rising inflation could make it harder for consumers to "break the habit" of living on their overdraft, while the higher cost of living could push more people into the red.
According to moneynet.co.uk, the average interest rate on authorised overdrafts has risen from 13.85% in February 2008 to 15.32 per cent now.
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