10% of current account holders are constantly in debt
24 February 2010 / by Andy Davies
Five million current account holders are permanently overdrawn, as one in ten Brits live in their overdraft, moneysupermarket.com has revealed.
Despite a significant number of Brits living in the red, the figures represent an improvement on 2008’s findings when 52 per cent of people dipped into their overdraft compared 38 per cent last year.
Encouragingly, the number of current account holders permanently overdrawn has also fallen in the past year from 17 per cent in 2008 to 10 per cent in 2009.
Commenting, 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.”
According to the price comparison website, current account holders with an overdraft of £500 could potentially save up to £240 a year by switching to the right account.
Analysis by moneysupermarket.com has found that the Halifax Reward Current Account could benefit people who go overdrawn less than five days a month. The overdraft charge for the account stands at £1 per day for balances under £2,500, but account holders receive £5 monthly credit from Halifax which would cover the cost of the charges.
For current account holders that are constantly in the red, the price comparison website suggests the Alliance & Leicester Premier Direct Current Account as it has the lowest annual charge of £60.
Warning consumers about be overly or entirely reliant on their overdraft, Mr Mountford said: “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.
“Consumers should always consider the ways in which they use their current account, and make sure they have the right product to match.”
© Fair Investment Company Ltd
| Provider | Account | Set Up Fee | Fee per month | Features | Apply |
|---|---|---|---|---|---|
 |
CardOneBanking Managed Account | N/A | £12.50 | No credit checks.** Prepaid MasterCard. No account opening fee. | More Info > |
 |
ClearCash Account | £4.95 | £9.95 | No credit checks**. Prepaid MasterCard. Credit Building facility. | More Info > |
 |
CashPlus Prepaid MasterCard Deluxe | £4.95 | £9.95 | No credit checks.** Up to 20 free payments and standing orders a month. Prepaid MasterCard. | More Info > |
**See Terms and Conditions
| Provider | Account | Set Up Fee | Fee per month | Features | Apply |
|---|---|---|---|---|---|
|
CardOneBanking Managed Account | N/A | £12.50 | No credit checks.** Prepaid MasterCard. No account opening fee. | Apply Now > |
|
CashPlus Prepaid Mastercard (Deluxe) | £4.95 | £9.95 | No credit checks.** Up to 20 free payments and standing orders a month. Prepaid MasterCard. | Apply Now > |
| Account | Interest (AER) | Overdraft Rate | Funding Required* | Fee pm | Features | Apply | |
|---|---|---|---|---|---|---|---|
 Nationwide » |
FlexDirect Current Account | 5.0%* | 0% for 12 months | £1,000 per month | N/A | 5.0% IN-CREDIT INTEREST on balances up to £2,500 for the first year. | More Info > |
Nationwide » |
Nationwide FlexPlus Current Account | 3.0%* | 0% for first £250 | No minimum | £13 | 3.0% INTEREST on balances up to £2,500 | More Info > |
 Santander Bank » |
Santander 123 Current Account | 1.50%* | Up to £3 per day | £500 per month | £5 pm | *1.50% AER (variable) on your entire balance up to £20,000. Up to 3% cashback on household bills. | More Info > |
Nationwide » |
Nationwide FlexAccount Current Account | N/A | 0% for first 3 months | No minimum | N/A | 3 months interest-free overdraft and no monthly account fee | More Info > |
 First Direct » |
1st Account Current Account | N/A | 0% for first £250 | No minimum | Free if funding £1,000 or £10 below £1,000 | Switch your current account and you’ll get a free gift worth up to £150. £250 interest free overdraft. Free banking if paying over £1,000 per month. Satisfaction guarantee – £100 if you leave within 6 months | More Info > |
| Account | Interest (AER) | Overdraft Rate | Funding Required* | Fee pm | Features | Apply | |
|---|---|---|---|---|---|---|---|
Nationwide » |
FlexDirect Current Account | 5.0%* | 0% for 12 months | £1,000 per month | N/A | 5.0% IN-CREDIT INTEREST on balances up to £2,500 for the first year. | Apply Now > |
Santander Bank » |
Santander 123 Current Account | 1.50% AER* | Up to £3 per day | £500 per month | £5 pm | *1.50% AER (variable) on your entire balance up to £20,000. Up to 3% cashback on household bills. | Apply Now > |
| Account | Interest (AER) | Overdraft Rate | Funding Required* | Fee pm | Features | Apply | |
|---|---|---|---|---|---|---|---|
|
Nationwide FlexDirect Current Account | 5.0%* | 0% for 12 months | £1,000 per month | N/A | 5.0% IN-CREDIT INTEREST on balances up to £2,500 for the first year. | More Info > |
|
Nationwide FlexPlus Current Account | 3.0%* | 0% for first £250 | No minimum | £13 | 3.0% INTEREST on balances up to £2,500 | More Info > |
|
Santander 123 Current Account | 1.50%* | Up to £3 per day | £500 pm | £5 pm | *1.50% AER (variable) on your entire balance up to £20,000. Up to 3% cashback on household bills. | More Info > |
| Account | Interest (AER) | Overdraft Rate | Funding Required* | Fee pm | Features | Apply | |
|---|---|---|---|---|---|---|---|
 |
Student Bank Account | N/a | £500 Interest Free increasing to £2000 | No minimum | N/a | Choose 1 of 3 great offers: Amazon Prime Student subscription, National Express Coachcard, or Tastecard | More Info > |
|
FlexStudent Bank Account | 1% | Overdraft limit of £1,000 increasing to £3,000 in year three | £500 every academic term | N/a | The UK’s only fee-free student current account. Interest-free and fee-free overdraft | More Info > |
|
123 Student Current Account | Up to 3% | £1500 Interest Free increasing to £2000 | £500 every academic term | N/a | A free 4-year Santander 16-25 Railcard which could save you 1/3 off rail travel in Great Britain | More Info > |
$(document).ready(function(){ $("#ctl13_GeneralComparisonTabsTable1_divTablesWraper .comparison_table_tabs_container a").click(function(){ var $this = $(this); var TableStyle = ''; var $tab;
if (TableStyle=='uswitch') $tab = $this.parent('li'); else $tab = $this.parent('div').parent('div').parent('td');
var $activeTab = $('#ctl13_GeneralComparisonTabsTable1_divTablesWraper .comparison_table_active_tab');
if ($tab.attr('class')=='comparison_table_active_tab'){ return false; }
$activeTab.removeClass('comparison_table_active_tab'); $activeTab.addClass('comparison_table_inactive_tab');
$tab.removeClass('comparison_table_inactive_tab'); $tab.addClass('comparison_table_active_tab');
$('#ctl13_GeneralComparisonTabsTable1_divTablesWraper .TableTabDiv').hide(); $('#ctl13_GeneralComparisonTabsTable1_divTablesWraper #' + this.className).show();
return false; }); });
function openFactSheet(url) { var w = window.open(url, '', 'width=1000,height=800,scrollbars=yes,resizable=yes'); w.focus(); }