Consumers prefer to pay off debt than save - Money - News - Moneyfacts

News

Consumers prefer to pay off debt than save

Consumers prefer to pay off debt than save

Category: Money

Updated: 23/06/2010
First Published: 23/06/2010

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 It is now over 6 months old so the content may be out of date.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 choosing to use their spare cash to pay off credit cards and loans rather than save.

With the returns on offer from many savings accounts historically low, it appears many people are prioritising the repayment of their loans instead.

High street banks confirmed the amount they lent to consumers in the form of unsecured loans was less than the amount they received in repayments during May.

The number of purchases made with credit cards also continued to weaken, despite people beginning to spend more on the high street, according to the British Bankers' Association (BBA).

Although demand for personal loans remained stable, the latest figure was still 13% down on a year earlier.

"The low interest rate environment is resulting in customers choosing to reduce or pay off borrowing, particularly personal loans, rather than saving," said BBA statistics director, David Dooks.

The data also revealed that mortgage approvals by high street banks crept slightly higher in May.

The number of loans approved for house purchase increased by 2% on the previous month to 36,709, while there was a small drop in the number of loans approved for remortgages.

High street banks are now the main providers of finance in the mortgage market, supplying three quarters of all new home loans.

To find the financial products that are best for you, why not check out our charts showing the best selling mortgage deals and savings accounts.



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 Any products featured may be withdrawn by their provider or changed at any time.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

Money worries lead to Christmas on credit

Money worries are putting Christmas at risk for up to five million Brits, with 10% saying they regularly worry about money in the lead up to Christmas, and the same proportion feeling stressed about how much they are spending.

Would you spend more for a character property?

We all have our own ideas of what makes a dream home, and for many, character features are at the top of the list. But how much more would you be willing to pay for those kinds of additions – and could they even help you save money in the future?

A quarter of Brits have fallen victim to a scam

Think you know how to spot a scam? It may not be as easy as you’d think, with 25% of Brits admitting that they’ve been the victim of one in the past, and a further 73% are concerned about being scammed in the future.
 
Close