Millions of Over-50’s Overdrawn at the Bank

New data from online comparison site, uSwitch.com, has revealed that the UK’s over-50s are £2.7bn overdrawn on their current accounts, showing that it’s not just the nation’s youth who are prepared to live with debt.

In fact according to uSwitch.com, nearly 12m people aged over 50 currently have an overdraft facility with their bank account, with a staggering 4.5m UK residents going in to the red on a regular basis.

However, a great number of those with overdrafts actually rely on the facility to get by, with 1.5m over 50s using their overdrafts to pay household bills, and 1.2m using their overdraft to pay for the weekly shop. Currently, the number of over-50s who are permanently in the red stands at 850,000.

The figures from uSwitch show that the average overdraft balance among those aged over 50 is £615, whilst one in eight are over a £1,000 overdrawn. These balances can make it difficult for especially those of pensionable age to get back into the black, as their pensions don’t allow for the overdraft to be cleared as well as providing day-to-day living.

Nick White, head of personal finance at uSwitch, said: “ These figures shatter the myth that debt is something that only affects the younger generations in this country.

“At a time when the only interest rates the nation’s elderly should be worrying about are those on their savings accounts, too many are finding out how expensive it is to borrow on an overdraft – or worse still, to go overdrawn without authorisation.”

These figure represent a financial burden to many of those over-50s who are overdrawn. In total, the country’s over-50s pay around £330m a year in interest on their overdrafts, with 28 per cent going over their authorised limits, thus incurring further charges and higher rates of interest than normal.

USwitch’s Nick White added: “ As the banks cash in on over £568m in interest and penalty charges, the over-50s are left to worry about their retirement and the financial shortfalls that they are faced with in the immediate future.

“ It seems that the banks are not concerned that they are lending money to customers who are close to, or have already reached, retirement age. Quite the opposite, in fact, with one in five of those surveyed over the age of 50 saying that their bank had increased their overdraft limit without being asked to do so.”

Alisdair Milton
8th May 2006

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