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Overdrafts: five million always in debt to bank

Five million British people are permanently overdrawn, moneysupermarket.com calculates.

As headlinemoney.co.uk reports, one in ten people `live on their overdraft` - always in debt to their banks - and a further 12% use their overdrafts five times a year or more. In total, 38% of bank customers have used their overdrafts at some point in the last year.

Nonetheless, the figures are still an improvement on last year. They`re based on an online poll carried out at the end of January this year - but back in March last year, the results of a similar poll indicated that 17% of British adults were permanently overdrawn, a further 15% used their overdrafts more than five times a year, and more than half (a full 52%) relied on their overdraft once a year at least.

"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," said Kevin Mountford, head of banking at moneysupermarket.com.

"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."

A spokesperson for the IVA Advisory Centre commented: "Overdrafts can help people cope with short-term money problems, but they can be an expensive form of debt if someone relies on them too much. Plus, carrying debt of any kind can be dangerous in itself - anyone`s circumstances can change, and a drop in income can easily turn a minor money worry into a major debt problem."

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The IVA Advisory Centre are a licensed Insolvency Practice, offering free debt advice as well as IVAs and a comprehensive range of other debt solutions. If you are in debt and would like to explore your options, contact one of our advisers today.