Consumers look to pay off debts - Money - News - Moneyfacts

News

Moneyfacts.co.uk News brings you the latest financial & economic news & reviews of the best products in the UK by our team of money experts.

Consumers look to pay off debts

Consumers look to pay off debts

Category: Money

Updated: 29/09/2010
First Published: 29/09/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Consumers are increasingly looking to pay down their debts, rather than take out new credit, figures from the Bank of England show.

Net consumer credit fell by £120 million in August, comprising of overdrafts, personal loans and credit cards.

It is the biggest fall seen in a month since November 2009.

The figures suggest a change in the financial behaviour of Britons, who have been stung into action by the effects of the credit crunch.

The stricter lending criteria adopted by the UK's banks and building societies has also stemmed the flow of credit.

With people choosing to pay off their debts, the amount consumers now owe is the lowest since February 2008, although consumers still have some way to go to pay back a collective balance of £1.43 trillion.

The figures will no doubt disappoint the deputy governor of the Bank of England, who this week said that one of the reasons for the current economic policy of low interest rates was to encourage people to spend, rather than save.

However, with the collective consumer debt remaining relatively stable in the last couple of years, people seem unwilling to ramp up their spending, especially in light of double dip fears.

Figures from the Bank also showed that the number of loans approved for house purchases fell slightly in August.

There were 47,372 approvals in the month, down from 48,346 in July.

By contrast, loans for remortgages increased from 26,765 to 28,042 in August, with numbers also above the six month average.

Many homeowners have chosen to stay on the standard variable rate in recent times because low interest rates have meant preferable mortgage repayments.

Find the best mortgage rate - Compare best selling mortgages

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Have your financial habits changed?

2016 was certainly a turbulent year, and it's had a notable impact on household finances. Indeed, research shows that recent events have influenced the way over half of UK respondents manage their finances, with many becoming more cautious.

Kids got £180 in pocket money in 2016

New research has revealed that kids aged 4-14 received an average of £180.44 in pocket money over the last year, which was topped up by an additional £47 on average received in cash over the Christmas period.

How much could it cost to get fit in 2017?

We’re almost a week into 2017, and hopefully, many of those New Year’s Resolutions are still going strong. Figures suggest that the most popular resolution is to achieve a healthier lifestyle, but just how much could that ambition set you back?
 
Close