Do you really need an overdraft?

As the UK banking sector looks to recover lost income from various rulings by the UK government and the regulatory bodies, it would appear that overdrafts are very high on the agenda. While many banks have announced an increase in their 0% barrier between a credit and debt balance on your account, many have also hiked interest rates outside of the buffer zone and also introduced significant fines for those using unauthorised overdraft facilities.



This now begs the question as to whether the vast majority of the UK population actually need their overdraft facility? Could they get by on their savings and income?



It seems crazy to have an overdraft, on which you are being charged interest, when many in the UK have savings put to one side earning next to 0%. While every financial situation is very different to another, it would surely make sense to consider using your savings in a sensible fashion to reduce interest and charges on potential loans and overdraft facility.



The temptation to use an overdraft to its full capacity has proved to be too much for a number of people and they are now finding themselves in serious financial trouble. What will they do when the banks decide to call in these loan and overdraft facilities?