Five million Brits live in overdrafts

By Sarah Engle, Wed 24 Feb 2010 - Published in Banking

New research from moneysupermarket.com shows that ten per cent of Brits permanently live in their overdrafts.

The price comparison website revealed that around five million people never see their bank account reach positive figures, while another 12 per cent temporarily fall into the red five times or more through the course of a year.

However, the organisation noted that the figures show an improvement on the situation 12 months ago, when 17 per cent of people were permanently overdrawn and 15 per cent regularly dipped into it.

Kevin Mountford, head of banking at moneysupermarket.com, commented: "Whilst 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 the prospect of rising inflation will make it harder for people to get into the black and claimed that more could find themselves relying on their overdrafts.

This week, Martin Bamford, chartered financial planner for Informed Choice, explained that inflation, combined with the Bank of England's historically-low base rate, is having a negative effect on the value of savings.

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