One in ten Britons constantly overdrawn

Around one-in-ten Britons are always overdrawn as they struggle with financial management. 

Research by thinkmoney has uncovered the worrying …

Around one-in-ten Britons are always overdrawn as they struggle with financial management. 

Research by thinkmoney has uncovered the worrying statistic and these people could be incurring hefty charges if these overdrafts are not authorised. 

The seriousness of the situation can be shown by a recent investigation by Which?, which discovered that bank overdrafts can actually turn out to be as expensive as payday loans if they are not properly managed. 

This is in part due to the 'sky high' default charges facing many consumers if they go into the red. These typically vary between £20 and £30, while they can also have a negative effect on a person's credit rating. 

With roughly 4.5 million people struggling to make their pay cheques last any length of time, it means many are always in debt to their bank or building society. On top of this, 11 per cent of respondents rely on their overdraft at least once a month, while four per cent do so from time to time. 

Ian Williams, director of communications at thinkmoney, said: "Slipping into overdraft territory is a common fear – and the charges can soon mount up, especially for those who don't have an authorised overdraft."

He added there are some people who require "hands-on budgeting assistance", as this will help them to pay their bills on time and have enough disposable cash to last them through to the end of the month.

In terms of geographical differences, people in the north-east (61 per cent) were found to be the best at staying in the black, followed by the West Midlands (58 per cent) and both the south-east and Yorkshire and the Humber (57 per cent).

If consumers do find they cannot bring their financial situation under control then seeking debt management help is likely to be the best course of action. The last thing they should do is bury their heads in the sand, as this will only make the situation worse.

By James Francis

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