You are here: Home > Media > Press releases > The double debt repayment curve - concerned consumers return to repaying debts for the second time in 'credit crunch Britain'

• Print Page

The double debt repayment curve – concerned consumers return to repaying debts for the second time in ‘credit crunch Britain’

· Savings levels plunge as financially concerned Brits rush to repay debt

· Brits are repaying 7p of debt for every pound they saved in Q2 2010

· Savings levels fell by £7 billion over the Q2 2010 compared with Q1 2010

· For help with personal finances, look for an independent financial adviser at unbiased.co.uk

As economic reports warn of a double dip recession, Brits are returning to repaying their debts, a behaviour last seen at the beginning of the financial downturn. Latest figures from unbiased.co.uk, the professional advice website, reveal Brits have let savings nose-dive and reverted back to repaying more debt than they’re borrowing, a trend last seen in Q4 2008. 

Unbiased.co.uk’s Savings Brake research reveals the ratio of how much we are borrowing (including unsecured borrowing and equity release but excluding mortgages) contrasted with how much we are saving. 

Over the second quarter of this year, Brits repaid £1 billion over and above what they were borrowing – which equates to consumers repaying 7p of debt for every pound they saved.  This is in stark contrast to the final quarter of last year, which saw Brits adding £16 billion to the debt mountain as they borrowed 66p for every pound saved. 

The figures also reveal how Britain’s savings levels seem to be the victim of this rush to repay debts, falling by nearly £8 billion over the second quarter of 2010 compared with the first quarter – from £23 billion to £15 billion. 

Karen Barrett, Chief Executive of unbiased.co.uk, comments: “Brits appear to have shifted their financial habits to reflect those last seen at the height of the credit crunch, with debt repayment top of the priority list.  For the first time since 2008, consumers are now paying off more debt than they’re borrowing – however this has inevitably also resulted in a drop in savings levels.

“For those who are in a position to save, no matter how little, it is important to ensure you are doing whatever you can to make your savings work hard – especially as interest rates remain static.  In order to ensure you are making the right choices with your finances, it is vital to seek professional advice from an IFA.  An IFA can advise you on striking the best balance between borrowing and saving, as well looking at your overall financial position and recommending products from the whole of the market to guide you through.  

“You can carry out a free and confidential search to find an independent financial adviser near you by visiting unbiased.co.uk.”

-ends-

Notes to editors

According to independent analysis of the most recent official figures conducted by independent agency, RAKM, on behalf of IFA Promotion.  Data sources are Bank of England, British Bankers Association (unsecured borrowing + equity release, no mortgages), ABI, AIC and IMA.  With detailed queries on this analysis call Paul Hersey on 01737 213867.

Table 1

Karen Barrett, Chief Executive, unbiased.co.uk: 020 7833 3131

Anna Schirmer/Anna Moulds/Charli Scouller, Lansons Communications: 020 7294 3682

For expert commentary or case studies from over 150 media-friendly IFAs, journalists should visit www.unbiased.co.uk/bluebook.

About unbiased.co.uk, the professional advice website

The unbiased.co.uk portal is a free and confidential UK-wide search matching consumers with local professional advisers: ‘find an IFA’, ‘find a mortgage adviser’, and ‘find a solicitor’, and is currently inviting registrations for its ‘find an accountant’ service.  These searches enable consumers to find professional advisers by postcode, area of specialism, qualification and payment method. In 2009, unbiased.co.uk fulfilled half a million searches for local, professional advice. 

IFA Promotion, the organisation behind unbiased.co.uk, is now in its 21st year, and was set up to promote the benefits of independent financial advice to consumers.  IFAP is sponsored by the following companies:

Registered Office: unbiased.co.uk is the consumer brand of IFA Promotion Ltd, 90 St. Vincent Street, Glasgow G2 5UB. Registered in Scotland: No. 114606