1 in 4 go overdrawn halfway through the month

By midway through the month more than a quarter (27%) of adults in the UK have already dipped into their overdraft, new research has found.
 
According to a survey conducted on behalf of budgeting account provider Thinkmoney.co.uk, 27% of respondents enter their overdraft by the 17th day following payday – in other words just over two weeks after their wages or benefits go into their account. This is not including the one in 100 (1%) people who say they are overdrawn all month long.
 
Every month, a third (35%) of Brits go into their overdrafts. And the sooner they go in and the longer they spend in the red, the more at risk they may be of going over their overdraft limit and incurring charges as a result.
 
Worryingly, along with the people who are always in their overdrafts, more than one in five (21%) respondents admit they are in their overdraft within just a week of payday. More troubling still is the finding that more than one in 10 (13%) slip into being overdrawn just a day after they get paid.
 
Being overdrawn is more commonplace among younger people, with half (50%) of 18 to 24-year-olds revealing they are overdrawn for at least part of the month. This drops steadily until people reach the age of 55 and over, with just 22% of this age group revealing they go into their overdrafts during the average month.
 
Across the country, residents of Northern Ireland are the most likely to say they are overdrawn before payday (47%), while people living in the South West are the least likely to (25%).
 
Spokesman for thinkmoney Ian Williams says: “An overdraft should be a safety net, there to help when something goes wrong. But it appears for many people being overdrawn has become the norm. In fact, many don’t regard it as a debt, but it is and spending most of the month overdrawn is a worrying position to be in.
 
“Whilst an authorised overdraft may be costly, an unauthorised overdraft could result in hefty charges and penalties. The thinkmoney Personal Account, which has a flat monthly fee, could help customers break the overdraft cycle by making it easier to budget through the month.”