Business World

Tuesday 24 January 2017

'10pc of UK permanently in the red'

Published 24/02/2010 | 12:26

10 per cent of people are permanently in debt, a survey has claimed
10 per cent of people are permanently in debt, a survey has claimed

Around 10pc of people in the UK are permanently overdrawn and not getting back into the black when they receive their salary each month, a poll has shown.

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The moneysupermarket.com survey also showed that a further 12pc used their overdraft at least five times a year.

But the figures are an improvement on last year's results, when 17pc of British people said they were permanently overdrawn and 52pc had dipped into the red at least once during the previous year.

Kevin Mountford, head of banking at moneysupermarket.com, said: "Whilst it is encouraging to see less and less people reliant on their overdrafts, we should be concerned that there are still such a large number of people permanently overdrawn.

"With rising inflation, it is going to be difficult for many to break the habit of living in the red, and it may be that more people will fall back into this position as living costs increase."

Meanwhile, research from insurer Aviva painted a similarly gloomy picture of people's finances.

The group found that the average household would run out of money after just 14 days if one of its wage earners was unable to work due to illness or if they died.

Around 24pc of people also admitted that they could only lay their hands on £100 at a week's notice, without resorting to borrowing money.

Overall, the average household would be able to lay their hands on just £914, the equivalent to two weeks' expenditure for the typical family, if they lost their income.

The study also found that just 37pc of households have life insurance or critical illness cover, with 19pc saying they would instead sell their home if they needed to raise an alternative income, while 31pc said they would give up their car.

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