A new study has shown that five million Britons are permanently overdrawn: a trend that could worsen if inflation were to rise further.
Research from moneysupermarket.com shows that 10% of people with
current accounts were overdrawn throughout 2009. A further 12% dipped into their overdrafts at least five times during the year, and 38% of people with
current accounts used their overdrafts at least once during the year.
Worrying though these statistics may seem, they are actually an improvement on the figures from 2008, when 17% of people with
current accounts were constantly overdrawn, 15% used their overdraft five time throughout the year, and 52% relied on their overdraft at least once during the year.
Kevin Mountford, who was involved in carrying out the research, 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. With rising inflation, it is going to be difficult for many to break the habit of living in the red, and it may be that more people will fall back into this position as living costs increase."
Mountford also warned that banks were entitled to reduce the size of their customers’ overdraft facilities with “very little warning”.
