Savings Levels Up As Debt Repayments Fall

Fri, 10 Jun 2011

Britons are concentrating more on saving money and less on repaying their debts, new research has found.

A report by professional advice website y Unbiased.co.uk shows that the amount of money saved during the first three months of the year rose by the largest level for two years, with some £26.9bn set aside - up from £21.1bn in the previous quarter.

However, the increased focus on savings came at the expense of debt repayments, with the amount of debt paid back (£1.8bn) falling to the lowest since the third quarter of 2009.

Despite the slowdown, debt repayments continue to outweigh current consumer borrowings – a trend which has been going since October 2008.

Commenting on the findings, Karen Barrett, chief executive of unbiased.co.uk, said: "It is extremely encouraging to see the level of savings increase at the start of this year and it's certainly an interesting turnaround from the previous quarter. We have to ask why people are saving more but paying off less debt ?"

"It seems that a rainy day fund is proving more essential now than it has ever been - with rising inflation, a looming interest rate rise and more job losses it's no surprise that people are concerned and comforted by having cash to hand and accessible."

"Hopefully this is not just a blip we are seeing in savings fuelled by recent redundancy payments and low consumer confidence."
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