Around 10% of people never get out of overdraft, meaning they are paying fees that only add to their debt. More than a third of all account holders have dipped into their overdrafts at some point in the past 12 months.
Young people are more likely to use their overdraft, with 46% of 20 to 29 year olds slipping into the red over the last year, meaning many who should be saving for their future or hoping to get on the housing ladder and take out a mortgage are left in a financially vulnerable position.
By contrast, just 18% of over 70s have used their overdraft in the last 12 months.
While more than a third of current account holders have gone overdrawn in the last year, half said they would reduce their spending or draw on savings to prevent themselves from relying on their overdraft.
Find the best account if you’re overdrawn
A spokesman for comparison site Moneysupermarket.com, which conducted the survey, said: ‘Times are extremely tough for UK consumers so it’s no surprise to see so many Britons living in their overdrafts. The recent rises in the cost of living have made the habit of living in the red even harder to break for many consumers.
If you are often overdrawn, you should think of switching your bank account to an account which offers the best rates for customers who regularly use their overdraft facilities. Currently Which? Recommended Provider First Direct‘s 1st Account tops our tables.
Budget 2011 Live Blog
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