Savings levels continue to rise but debt repayments falter
· Brits are repaying 10p of debt for every pound they save in the third quarter (Q3) of 2010 – decreasing from repaying 18p in Q2 2010, and 27p in Q1 2010
· Savings levels reach a yearly high of over £21 billion
· For help with personal finances, look for an independent financial adviser at unbiased.co.uk, the professional advice website
With continuing economic uncertainty, the latest figures from unbiased.co.uk’s Savings Brake* report reveal that while Brits’ savings habits reach an annual high, they are failing to keep up debt repayments to the levels seen earlier in 2010.
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.
Debt vs. savings
Over the third quarter of this year, Brits repaid over £2 billion of their debts – which equated to consumers repaying 10p of debt for every pound they saved. While this is having a positive effect on personal finances, overall debt repayment volumes have dropped since the beginning of 2010, when we saw people repaying 27p of their debt for every pound they saved.
Savings levels
However, while people are paying off less of their debts than earlier this year, there has been a steady increase in the amount of savings. In Q3 Brits saved an overall of £21 billion, compared to just over £18 billion at the start of 2010. While overall savings remain lower than they were during 2009 when savings were over £90 billion, debt payment levels are already higher than last year. In the first three quarters of this year, people have already paid off over £10 billion of debt, compared to just over £6 billion at the same point last year.
Karen Barrett, Chief Executive of unbiased.co.uk, comments: “Brits borrowing and savings habits appear to be in a state of flux – along with the overall financial economy – but it is encouraging to see debts are still being repaid, even if this is not at quite the same volumes as previously in the year. Savings levels have also increased on an upward trend throughout 2010 and are almost back to the levels previously seen at the beginning of 2009.
“For those savers who are consciously building up their nest egg, it is important to ensure you are doing everything you can to make your savings work hard for you – especially with interest rates remaining at an all time low. 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 as looking at your overall financial position and recommending products from the whole of the market. You can carry out a free and confidential search to find an independent financial adviser near you by visiting unbiased.co.uk.”
ENDS
* Research conducted by Purple Market Research on behalf of IFA Promotion. Source: Bank of England, ABCUL, ABI, IMA.
Please note: previously the Savings Brake research was conducted by Paul Hersey, RAKM, on behalf of IFA Promotion. Due to a change of research company, the methodology has changed. All stats in this press release have been calculated by Purple Market Research; therefore data is now only available from Q1 2009 onwards.
Karen Barrett, Chief Executive, unbiased.co.uk: 020 7833 3131
Anna Schirmer/Anna Moulds/Emily Falla, 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:
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AEGON |
J.P. Morgan Asset Management |
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Alliance Trust |
Legal & General |
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Aviva |
Lockton |
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AXA Life |
Lutine Assurance Services |
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Bright Grey |
MetLife |
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Canada Life Ltd |
Opinium Research |
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Cardif Pinnacle |
Prudential |
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The Children’s Mutual |
Royal London 360° |
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Clerical Medical Investment |
Scottish Life |
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Ecclesiastical Investment Management Ltd |
Scottish Widows Plc |
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Franklin Templeton Investments |
Standard Life Assurance Company |
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Friends Provident |
Sun Life Financial of Canada |
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ICM Research |
Zurich Intermediary Group |
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Invesco Perpetual |
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
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