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Have your financial priorities changed?

Have your financial priorities changed?

Category: Money

Updated: 26/05/2010
First Published: 26/05/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
The financial priorities of UK households continue to change as the fallout from the recession lingers on.

According to the latest data from the British Bankers' Association (BBA), people are increasingly choosing to forego saving in order to pay off their debts instead.

High street banks said the amount they lent to consumers through credit cards, loans and overdrafts during April was £0.3 billion lower than the amount they received back from consumers in repayments.

Meanwhile, personal deposits into savings accounts increased by just £0.4 billion over the month, significantly down on the £5.4 billion that savers had stashed away into their savings accounts in March.

"Household priorities are clearly reflected in these latest data, with people paying down debt rather than building up savings, even in the main ISA season," said David Dooks, statistics director at the BBA.

"Uncertainties about the impact of government policies and the economy on households and businesses will continue to dent consumer confidence and influence decision-making."

Amongst other figures revealed by the BBA, mortgage lending by the banks remained subdued in April.

Although the number of mortgage deals approved for people buying a house was higher than at the same point a year earlier, the BBA said the figure remained low when compared to historical trends.

However, Simon Rubinsohn, chief economist at the Royal Institution for Chartered Surveyors, said the unfavourable comparison was largely due to the rush of home moves completed at the end of last year prior to the expiry of the stamp duty holiday.

"The subsequent decision of the previous government to introduce a new incentive for first time buyers is likely to become increasingly visible in the mortgage data over the coming months," he added.

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