Moneysupermarket.com's loan information figures reveal overdraft crisis
A personal finance expert has warned consumers of the dangers of being permanently overdrawn.
New loan information figures have revealed that five million adults in Britain are permanently in their overdraft.According to moneysupermarket.com, ten per cent of the British adult population are always in the red with their banks.
In addition to this, a further 12 per cent fall into the red five times or more a year, while 38 per cent of consumers have used their overdraft facility at some point in the last 12 months.
However, the latest figures represent an improvement on the situation this time last year, when 17 per cent of adults were permanently overdrawn and a further 15 per cent went overdrawn more than five times a year.
Kevin Mountford, head of banking at moneysupermarket.com, expressed concern that so many Britons are permanently in financial problems and said it is "going to be difficult for many to break the habit of living in the red".
He added: "The dangers of being overly, or entirely, reliant on your overdraft are clear; firstly this can be an extremely expensive debt to carry if it hasn't been agreed with your bank in advance, and secondly your bank can reduce the size of your overdraft with little warning."
Meanwhile, the British Bankers' Association (BBA) recently said demand for new personal loans fell throughout last year as a result of the recession.
The cumulative outstanding value of personal loans fell by £289 million last month, seasonally-adjusted loan information figures found.
Posted by Tobias Bluth
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