The parlous state of many tenants’ personal finances has been highlighted by website CompareTheMarket which claims that one in 10 rely on overdrafts to cover the rent.
The site’s research found two-fifths use their overdraft for emergency funding and nearly one quarter use them to cover the cost of everyday bills which is concerning.
Some one in 10 use them to cover rent, with a similar proportion using overdrafts to cover mortgages.
CompareTheMarket claims this is a highly expensive way to manage debt due to fixed daily or monthly charges, as well as fees for having an overdraft facility in place.
From April 6 new Financial Conduct Authority rules mean these charges will be scrapped and banks must charge a simple annual interest rate for overdrafts, without additional fees and charges.