You are here: Home - Credit Cards & Loans - News -

Women and under-35s most likely to use overdrafts

0
Written by: Cherry Reynard
21/06/2017
A fifth of affluent households rely on their overdrafts every month, with women more likely than men to go into the red.

Alliance Trust Savings surveyed 2,000 investors with personal income of at least £35,000 or a household income of at least £60,000, plus some level of household savings.

The week before payday is the most vulnerable. Overall, 24% of women tend to go into their overdraft each month, compared to 15% of men.

Use of overdrafts is also more prevalent among younger people: 29% of 25-34-year-olds regularly use an overdraft, rising to 32% among women in this age group, compared to just 11% of those aged 55 or more.

Regionally, men from London are the least likely to go into overdraft, with nine out of ten (89%) never doing so, while women from Scotland are the most likely, with a third (31%) using one. Two percent of both men and women surveyed are always overdrawn as their income does not clear their overdraft.

Sara Wilson, head of platform proposition at Alliance Trust Savings, said: “Even among this relatively affluent audience, overdrafts are still an important tool for regular spending, with a fifth of respondents using them at some point during the month. Although reliance on overdrafts falls as we get older, one in ten aged over 55 are still using them regularly. Perhaps most surprising is that two percent of both men and women surveyed are always overdrawn.

“Understanding how to budget and balance your income with your outgoings is a crucial skill and becomes more important in later life when income from working needs to be replaced with income from savings.”

Overdrafts are generally one of the most expensive form of borrowing. Barclays and Santander charge 75p and £1 per day respectively for authorised overdrafts, while Nationwide, TSB and NatWest charge 18.9%, 19.84% and 19.89%. First Direct offers the lowest rate at 15.9% (source: USwitch). This compares to loan rates starting at 2.7% (Sainbury’s Bank).

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

YourMoney.com Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
remortgagors cash
Watchdog proposes changes to final salary pension transfers

The Financial Conduct Authority has proposed tougher advice measures be adopted by firms to help consumers considering transferring from a...

Close