The day we go overdrawn

Working people unable to stay in the black are now crossing into their overdrafts 20 days after being paid - a full week earlier than in 2007.

Similar research commissioned by price comparison site moneysupermarket.com two years ago had found workers were managing to hang on for 27 days. The new figure graphically illustrates the extent to which people are struggling to cope today.

Over half of the workforce was overdrawn at least once in the past 12 months, with 17 per cent continually on the wrong side of their overdraft limit - up from 10 per cent in 2007.

Kevin Mountford, head of banking at moneysupermarket.com, said: "The 20th is now the date each month that Britain goes overdrawn.

"These findings are a little disconcerting, especially given the direction interest rates have been heading lately.

"We have found the difference between overdraft rates and in-credit rates has increased by nearly four percentage points over the past year - with it now averaging 12.4 per cent. This is most definitely a time for prudence with your current account.

"Your overdraft can be a murky place to reside - especially if you are close to the edge of your authorised limit. Unauthorised rates are higher and have sharp penalty fees of up to £35 for breaching your agreement.

"The Office of Fair Trading has been investigating current accounts for some time now, but many banks still levy these hefty charges for exceeding your limit.

"People who continually find themselves in the red should look closely at their spending to see where they can save. Anyone who fears they may exceed their overdraft needs to speak to their bank to see about temporarily increasing their limit to avoid being stung by unauthorised charges.

"If, like 53 per cent of the population, you are often in the red, you need look out for the best overdraft deals, such as from the likes of Abbey and Alliance & Leicester."