Almost four and a half million of Britain's over 50s regularly use their banking overdraft facility at a cost of £2.7 billion, according to new research.

A study from price comparison website uSwitch.com found 850,000 older people are permanently overdrawn and almost half of those using their overdraft do not know how much it is costing them.

In fact, the nation's over 50s are paying £330 million a year in interest for the facility and more than a quarter who have gone overdrawn without authorisation or exceeded their limit are forking out £70 each time – adding up to an estimated £238 million profit for the banks.

"At a time when the only interest rates the nation's elderly should be worrying about are those on their savings accounts, too many are finding out how expensive it is to borrow on an overdraft — or worse still, to go overdrawn without authorisation," said Nick White from uSwitch.com.

The older generation is turning to the expensive form of borrowing to pay for bills and buy their weekly shopping - 1.5 million Britons over the age of 50 use it for bills and 1.2 million borrow on their overdraft to buy groceries.

Charity Age Concern said ten per cent of older callers to its helpline need help managing their household payments, mortgage repayments and council tax.