Despite the undoubted recent improvement in the UK’s economy and recent figures from Aviva’s latest Family Finances Report revealing that income levels have reached record levels, it seems that Brits are still struggling to balance the books.
The economy has finally begun to move in the right direction since the recent financial downturn which affected so many areas of society. However, things are not looking utterly positive for everyone.
According to a survey by Think Money, a quarter of Brits manage to eke out their salaries for 16 days post payday before sliding into their overdrafts.
In an average month just over a third (35%) of Brits go overdrawn, and further figures from the research revealed that some Brits don’t even reach the end of the month before going into the red.
While 21% of those questioned revealed that they are already in their overdrafts within a week of payday, 13% only manage to make it a day after they have their salaries in hand before going overdrawn.
Which region is the most likely to be overdrawn?
According to the research, those in Northern Ireland are the most likely to say they are overdrawn before pay day (47%). In contrast, people living in the South West (25%) are the least likely to become overdrawn before their monthly wages hit their bank accounts.
A spokesman for thinkmoney, Ian Williams, says: “An overdraft should be a safety net, there to help when something goes wrong. But it appears for many people being overdrawn has become the norm. In fact, many don’t regard it as a debt, but it is and spending most of the month overdrawn is a worrying position to be in.
“Whilst an authorised overdraft may be costly, an unauthorised overdraft could result in hefty charges and penalties.”
A payment method that helps you to remain in the black
A prepaid online card may be a good option for those keen to have a tighter rein on their budget. As a prepaid card is not linked to your bank account, you can only spend what’s on your card and no more on top of that.
Your card can be topped up online at anytime, this means that you won’t face the prospect of being overdrawn on your prepaid card and also serves as a real sign of flexibility.
It is also worth noting that additional security exists on these cards, while the exchange rate seen will be the one when the original transaction took place – providing protection should the exchange rate vary dramatically during a trip.