The day Britain goes overdrawn

Working Brits who are unable to stay in the black, cross into their overdrafts on the 20th of each month and 2.1 million never come out of the red.

The research commissioned by price comparison website moneysupermarket.com reveals, on average, working Brits hang on for 27 days before the dark-side beckons. The survey reveals over 10 million working Brits were overdrawn at least once in the past 12 months – including 2.1 million people who were continually on the wrong side of their current account.

Kevin Mountford, head of current accounts at moneysupermarket.com, said: “It’s no surprise so many people are permanently in the red – with interest rates having risen five times in the past year consumers are no doubt feeling the squeeze.

“People often dipping into their overdraft need to watch the Effective Annual Rate (EAR) as some can be punitive and they may find they are better off spending on a 0 per cent credit card in the short-term.

“Not only this, but your overdraft can be a murky place to reside – especially if you are close to the edge of the authorised limit. Unauthorised rates are often much higher and there are sharp penalty fees for breaching your agreement. The OFT is already investigating current accounts, to ensure consumers benefit from a much fairer and transparent proposition.”

Nearly half of Brits (48 per cent) cut back on their spending or curb their lifestyle as their money starts running out and one in ten have a sneaky dip into their savings.

Further findings were:

The best at staying in the black over the past 12 months were the ‘55 plus’ workers with 64 per cent permanently staying in credit, compared with just 40 per cent of 18 to 24 year old employees.

Five per cent of workers in East Anglia are permanently overdrawn as opposed to 18 per cent in the North East.

On average, those from Lancashire go overdrawn two days before the rest of Britain.

Five per cent of 45 to 54 year old workers were permanently overdrawn as against 15 per cent of 18 to 24 year old employees.