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Savings fall as Britons turn back to borrowing

Savings fall as Britons turn back to borrowing

Category: Savings

Updated: 01/04/2010
First Published: 01/04/2010

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 It is now over 6 months old so the content may be out of date.
Britons appear to be turning back to their pre-recession habits, with savings levels falling and borrowing on the rise once more.

Figures show that by the end of 2009, consumers were borrowing 62p for every pound they saved, indicating that public borrowing and lower savings levels could be a trend throughout 2010.

By contrast, at the end of 2008, £1.68 was being repaid for every pound saved, showing a conscious effort by the public to pay down debts according to unbiased.co.uk.

These habits were not carried through, however, with borrowing creeping higher by the beginning of 2009 and throughout the year.

At the outset of last year, Britons were borrowing just 13p for every pound they saved, but this climbed markedly to 62p by the fourth quarter of 2009.

"While we may be officially out of recession, these latest figures highlight that consumers are back behaving as they did before the onset of the credit crunch, even though the economy is not back to full strength," said Karen Barrett, chief executive of the website.

"The credit crunch appeared to have a dramatic shock effect on the public, who were jolted into paying their debts, but it appears this has failed to effect long term borrowing habits.

"There is no indication that we will see an improvement of financial behaviour in 2010."

Figures also revealed that UK consumers borrowed some £28.2 billion worth of non-mortgage debt last year, compared with a repayment of £39.3 billion in 2008.

Savings levels also halved, with only £71.6 billion of new money put aside in 2009, compared with £113.4 billion in 2008.

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