More British adults using their overdraft to pay for essentials

Nearly one in five adults does not have any savings and one in ten admits that they use their overdraft facilities every month in order to make ends meet, according to a recent survey.

The survey by financial solutions company, Baines and Ernst, of 2,000 British adults also found that 56 per cent admitted that they do not follow a monthly budget.

One in three of those questioned had savings of between £1,000 and £6,000 but one is seven had debts of up to £10,000. One in fourteen had debts of more than £10,000. Those between 35 and 44 had the most debt, closely followed by those in the 25 – 34 age group.

The survey gives a revealing picture of how many Brits are managing their finances. As many as 12 per cent of young people under 24 admit to not checking their bank balance because they are afraid that they will not have enough money to spend. Only four per cent of adults over 55 admit to ignoring their financial difficulties in this way.

Other studies have indicated that almost one third of UK adults rely on their bank’s overdraft facilities in order to afford everyday essentials.

Baines and Ernst managing director, Shaz Sulaman, said that an alarming number of adults are using credit to pay for essentials. Borrowing in this way can be an effective short term solution but debts can rapidly spiral out of control, leading to much larger financial difficulties that can seem insurmountable.

Sulaman’s advice for avoiding a downward debt spiral is to budget. Adults should, she said, draw up a detailed account of their income and spending each month. It is only by doing this that it becomes possible to identify where economies can be made and realistic budgets set.