Many savers in the UK are relying too heavily on an overdraft facility which is part of a
current account, an expert has claimed.
Recent figures have indicated that consumers are now saving less than they used to, and are more willing to regularly be in the red with their finances.
Furthermore, many people prefer to live of what they perceive as free money in their overdraft, rather than setting funds aside for a
savings account.
However, Jasmine Birtles, founder of moneymagpie.com, said it is a potentially dangerous practice to constantly rely on additional funds from the bank which still amounts to
personal debt.
"Most overdrafts aren't free and not only should we not be living off our overdraft, but we should be comfortably in the black at any given time with savings," she said.
Ms Birtles comments follow recent news that many banks are now charging record fees for overdrafts, despite the low base rate.
According to the Quarterly Bulletin from the
Bank of England, customers who go into the red are now paying an average of 19.1 per cent interest.
