Money & Stats: Britons Throwing Money Away By Direct Debit

Forgotten direct debits and standing orders cost British consumers thousands of millions of pounds a year, a report has found. New research has revealed that nearly one in five UK bank customers have 'derelict debits' -- costing them an average of 53_GBP/month. Almost half of all free-spending Britons admit they do not know who they are making payments to or exactly how much they are forking out. The research conducted by 'TNS' for 'The Prudential' said that 19 per cent have been 'stunned' to discover forgotten direct debits and standing orders on old club membership fees and former insurance premiums. The average of 53_GBP/person/month is equivalent to 427_million_GBP/month nationally. Britons claim to spend more than 13_100_million_GBP/month (excluding mortgages) by direct debits and standing orders. Yet 47 per cent (20_million_people) do not know who the payments are going to or the precise sums involved. Mr.Martin Lewis, an independent financial adviser who created moneysavingexpert.com, said:
'We live in a world where people are financially phobic, scared, and not wanting to deal with their money.
'They would prefer to bury their heads in the sand. With everything going on around you it is very easy to lose track of these things. 'The companies are the enemy because they have a vested interest in money dripping out of your account -- they earn interest on it. 'The only people who have responsibility for our finances are ourselves and I don't believe people have realised that yet'.
Although the average amount lost monthly on unnecessary payments is 53_GBP, many people were much worse off. More than 10 per cent (860_000_people) confessed they had wasted over 150_GBP/month on forgotten electronic payments. The most common forgotten payments are for old club memberships and insurance policies that are no longer needed, says the report. Yet those that forget about payments for one month are the lucky ones. The survey shows that 42 per cent (3.4_million_people) of those who have made pointless payments did so for up to six months, with a further 15 per cent (1.2_million_people) forking out needlessly for more than six months. Mr.Angus Maciver, brand director at 'Prudential UK', which surveyed more than 1_000_Britons, said:
'Millions of people may as well take 15_GBP out of their bank account each week and give it to a complete stranger. That is the net result of their forgetfulness. 'Electronic payments are highly convenient and effective for those that manage them properly. 'But the large number of derelict debits and standing disorders are a graphic illustration of the negative impact of poor financial management'.
'Forgotten direct debits 'costing billions'', William Lyons, The Scotsman,2005-01-20


Anonymous Anonymous said...

No wonder they all encourage us to take out direct debits!

1/20/2005 01:46:00 pm  

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