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14/05/2012 15:23:40

Savings most popular resource before payday

Britons are most likely to turn to their savings accounts if they run out of money before payday.

Moneysupermarket.com found that over a third (38 per cent) use their savings when they run out of money, compared to 29 per cent who use an authorised overdraft and a quarter who turn to a credit card.

A further 20 per cent borrow money from friends or family, 11 per cent extend an overdraft limit and four per cent use a payday loan to tide them over.

However, with large variances in the amount of interest you will pay on the various credit and overdraft options available, Kevin Mountford, head of banking at MoneySupermarket.com, has urged consumers to carefully consider how they survive until payday.

"It really does pay to research your options and think about the additional interest you could end up forking out beforehand," he advised.

"A balance transfer credit card could be a good option for those with existing debt on other cards."

Research by Halifax found that within a week of being paid, ten per cent of people begin to worry they will not have enough money to last until the end of the month.