Brits Putting Savings To One Side To Focus On Clearing Debts

Tue, 08 Jun 2010

Britons are saving less money and focusing more on repaying debts, according to new research by professional advice website unbiased.co.uk.

Figures published by the site yesterday revealed that the amount of cash saved by Brits during the first three months of 2010 totalled £16.53 billion, nearly a third less than the £24.08 billion saved in the previous quarter and the lowest figure for a year.

The statistics also showed that the amount of money people borrowed through credit cards, loans and equity release fell even more sharply – from £14.35 billion in the fourth quarter of 2009 to £6.1 billion in Q1.

But despite the lower level of debt people took on during the first quarter, unbiased.co.uk found that consumers still borrowed an average of 37p for every £1 they managed to save – a noticeable difference from the second half of 2008 when Brits were repaying £1.22 and £1.67 of their debts for every £1 they saved during the third and fourth quarter respectively.

Karen Barrett, chief executive of unbiased.co.uk, said: "Britons appear to have started 2010 with a tighter grip on their finances, as they are not borrowing as much as they were in 2009, even though this has resulted in a drop to savings levels."

But she added: "With interest rates still at an all time low and inflation on the up, it is important for people to ensure they are making their savings work hard for them, no matter how little they can afford to put away,"
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