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Financial woes on the rise

Financial woes on the rise

Category: Debt

Updated: 01/07/2011
First Published: 08/06/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The number of people experiencing financial problems every month is on the rise.

Eight million people will spill into their overdraft debt this month in a bid to keep up with their financial commitments, with two million believing they will fall into an unauthorised overdraft position, research conducted by R3 shows.

Falling into an unauthorised overdraft can quickly become a very costly move, as banks can charge you for everyday you go over your agreed overdraft limit.

The findings have also uncovered that a worrying six million people are currently behind with their bills and payments, a figure that has mushroomed by two million in the last three months alone.

Five million of us are worried about being made redundant, yet a third of people (32%) now admit that they are saving less than they used to - up 8% on the previous quarter; equating to 15 million people.

More than a third of people think their situation will worsen in the coming six months.

"These figures make for worrying reading. It is clear that many have found themselves in a position whereby they have to go into and often exceed their agreed overdraft in order to keep on top of their bills and debt repayments," said Frances Coulson, president of R3.

"Unfortunately, more often than not this leads to bank charges, which further deplete the amount available for bills. It's a catch-22 situation which can result in debts snowballing."

If you regularly find yourself in your overdraft you may wish to speak with your bank about how you can go about keeping out of it. Failing that, you could benefit from shopping around for an account that offers preferential rates for overdrafts.

You can begin your search at the Moneyfacts.co.uk Banking Best Buy tables.

If your situation is more serious and you are struggling to pay your bills every month, it could be worth seeking advice on how to deal with your debts.

Debt advice specialists such as the CCCS will offer free and impartial advice to those with debt problems.

Read our guide to - Dealing with Debt

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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