The cost of living crisis is starting to bite for households across the UK – with higher prices and bills yet to come.
Figures have revealed that the consumer prices index (CPI) measure of inflation stood at 11.1% in October – jumping up to a 41-year high from 10.1% the previous month.
The jump was driven by higher energy bills and more expensive food, with essentials such as milk and pasta leaping in price.
In a separate report based on the data, the Office for National Statistics (ONS) said these increases were weighing particularly heavily on the poorest in society.
The poorest 10% of households were hit by a 12.5% rise in their living costs for the month as those with less money spent "a greater proportion of their expenditure" on energy and food compared to wealthier households.
Thursday’s autumn statement is also set to hit households hard with more tax rises, with chancellor Jeremy Hunt expected to unleash tax hikes – including on council tax – and spending cuts to address a black hole in the nation’s finances.
With people needing to spend more on basic food items and energy in the cold winter months, it will be easy for many to pay out more than they have, going overdrawn in the process.
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Once overdrawn, expensive interest kicks in – meaning debt will quickly rack up if not paid.
First Direct 1st Account offers many a £250 0% overdraft. Lewis recommends using its eligibility checker first as the overdraft is not guaranteed.
Nationwide Flex Direct also offers a 0% overdraft and has an overdraft limit up to £2,750, depending on your credit score.
Starling Bank does not offer a 0% overdraft but has a low rate and no fees for exceeding your limit, Lewis said. Your overdraft limit, that depends on your credit score, can be controlled in the app, while you can also set up notifications if you are close to being overdrawn.
Lewis said that it was important to use the time while in your agreed overdrawn limit to pay back the debt and plan how to cut costs in the long term.
He also warned that high interest rates will kick in after your agreed overdraft period or if you go over your agreed limit.