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Britons shun saving to drive down debt

Britons shun saving to drive down debt

Category: Savings

Updated: 17/04/2009
First Published: 17/04/2009

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 It is now over 6 months old so the content may be out of date.

Britons spent the second half of 2008 abandoning saving in an attempt to pay off significant amounts of debt.

At the beginning of last year, the UK public were borrowing 66p for every pound saved, with savings levels rising to a high of £36 billion last spring, according to a study by Unbiased.co.uk

By the final quarter of 2008, £1.76 was being repaid for every pound saved, meaning savings during this period almost halved, dropping to £19 billion.

During the full year, some £38.6 billion of non-mortgage debt was paid off, a figure that more than cancels out the total amount borrowed by consumers in 2007 and 2008.

It is the first time in the study's eight year history that Britons paid off more debt than they took out in borrowings.

"2008 was a year of two halves in terms of people's financial behaviour," commented David Elms, chief executive.

"The financial turmoil which hit Britain last summer prompted a dramatic retreat from savings in favour of starting to pay down personal debt."

He added that latest evidence suggests that the emerging repayment trend is likely to continue.

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 Any products featured may be withdrawn by their provider or changed at any time.

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