Two million British bank accounts permanently in the red

Over two million people in Britain are constantly living off the overdraft facility of their bank account, according to a new report.

The research from moneysupermarket.com showed that almost half of the working population – ten million people - went overdrawn on their bank account at least once in the last 12 months.

Kevin Mountford, head of current accounts at moneysupermarket.com, said: "It’s no surprise so many people are permanently in the red - with interest rates having risen five times in the past year consumers are no doubt feeling the squeeze."

He warned that living off the overdraft of your bank account is not a long term option: "People often dipping into their overdraft need to watch the Effective Annual Rate (EAR) as some can be punitive and they may find they are better off spending on a zero per cent credit card in the short-term.

"Not only this, but your overdraft can be a murky place to reside – especially if you are close to the edge of the authorised limit.

"Unauthorised rates are often much higher and there are sharp penalty fees for breaching your agreement."

The most common date for people to dip into their bank account’s overdraft was the 20th of the month, in the run up to pay-day, with 18 to 24 year olds the worst offenders when it comes to going overdrawn.