April 11, 2006

By Peter Kenny

Cahoot, one of the largest internet banking institutions have announced some worrying spending cultures developing.

Cahoot’s recent announcement stated that 59 per cent of the UK’s population are spending more than what they earn. The result of these figures means that over 49 per cent use their to overspend and over 48 per cent use a bank account overdraft.

The latest figures show that more and more people are borrowing to sustain their lifestyle. A culture of buy it now pay for it later is growing and the worry is many people will find themselves in bad debt which will have a serious effect on their finances. It has been found that these extra purchases have been made on non-essential items like restaurants and clothes.

John Goddard, from Cahoot, said, "Once the bills and the mortgage are paid, people like to treat themselves, and by far the most popular way to do this going to a restaurant or having a takeaway. However, a disposable income equal to around a quarter of net salary doesn't always stretch as far as some people would like it to. This could create problems if people aren't managing their money properly and having to let their belts out when they should be tightening them!"

Cahoot offers an interest free overdraft facility of £100 to all current account holders and will send account holders a text message to let them know their overdraft limit has been reached.

It was found that many consumers welcomed more contact from their bank and over 41 per cent stated that they would like the same service as Cahoot’s from their own bank.

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