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Savings Plummet as Britons Pay Off Debt Mountain

        Savings levels fall by over 19 billion over the last quarter as Britons pay off a net 23 billion of debt

        For the first time in eight-year study the nation’s focus shifts towards paying off debt rather than taking out new debt

        For every pound saved in the last quarter, the British public also paid off 1.24 of their debt

• Visit www.Unbiased.co.uk to find out how you can take control of your finances by finding an IFA near you

New figures from Unbiased.co.uk, the online ‘Find an Independent Financial Adviser’ search show that the credit crunch is finally hitting home and worried consumers are taking drastic actions to reduce their debt mountain.

During the third quarter of 2008 consumers paid off over 23 billion more in debt than they took out in new borrowing. But according to the research, paying off the nation’s debt comes at a price – as it seems Britons are sacrificing their savings to get out of the red. Savings levels almost halved over the last quarter to an all-time low, from 38.5 billion in quarter two of 2008 to 19.3 billion in the third quarter – a reduction of over 19 billion.

These latest figures mark a first in Unbiased.co.uk’s eight-year Savings Brake* research, which reveals the ratio of how much we are borrowing, not including mortgage debt, contrasted with how much we are saving. For the first time since the study began, Britain is focusing on paying off debt rather than taking out new debt. For every pound UK consumers saved during the third quarter of 2008, they also paid off 1.24 of their debt. This is a huge contrast to the second quarter, where for every pound saved, the nation borrowed 15 pence. 

David Elms, Chief Executive of Unbiased.co.uk, commented: “2008 has been a turbulent year in terms of finances and these figures are unprecedented.  Britons appear to have taken drastic actions in an attempt to reduce their debt levels. For the first time in our research the nation has actually focused on paying off debt rather than accumulating even more.

“But like everything, this trend has left its mark on consumer finances. With such a focus on paying off debt, the UK savings levels felt the repercussions and dropped to an all time low.

“Especially in the current interest rate environment for many people the decision on whether to prioritise their savings or service their debt can be a difficult one to make. An Independent Financial Adviser (IFA) can help with this decision and make sure people make the best choices for their personal finances not just in the short term but also with long term goals in mind.”

To take control of your spending and borrowing, visit www.unbiased.co.uk to download your free copy of Unbiased.co.uk’s dedicated guide - Join the Savings Revolution - which looks at how you can budget to save more, and options of where to put any extra money.  You can also obtain details of local independent financial advisers to talk though the most suitable savings options for you by visiting www.unbiased.co.uk.

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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

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For further information please contact:

 

David Elms	Anna Schirmer/Jennifer Comerford/ Anna Moulds
Chief Executive	Lansons Communications
Unbiased.co.uk	020 7294 3682
020 7833 3131

 

For expert comment or case studies from over 200 media-friendly IFAs, journalists should visit www.unbiased.co.uk/bluebook to search online or call Unbiased.co.uk’s Media Services hotline on 020 7294 3682.

 

 

PLEASE NOTE: We have now discontinued the consumer hotline and so consumers seeking an IFA should visit www.unbiased.co.uk

 

 

1.      Unbiased.co.uk

Unbiased.co.uk is a not for profit organisation which promotes the benefits of Independent Financial Advice to UK consumers. 

 

Unbiased.co.uk, which is in its 19^th year, helps create over 7,500 pieces of positive coverage in the consumer media each year, highlighting the importance of seeking independent financial advice across online, broadcast and print media. This positive media generation influences consumers’ behaviour and increases their awareness of the benefits of seeing an IFA.

 

Unbiased.co.uk is now the online gateway between consumers researching their financial advice options online and IFAs. Over 60 white label versions of Unbiased.co.uk’s confidential ‘Find an IFA’ service are now running on partner websites including those of media and portal money channels, product provider sponsors and other industry bodies.

 

Over the past 12 months, over 525,000 consumers have used Unbiased.co.uk’s  ‘Find an IFA search’, or one of the white labels, to find a local IFA.

 

When searching the term  ‘Find an IFA’ on UK Google, around 80% of the returned links over the first five pages of search results now display either Unbiased.co.uk directly or a white label version of Unbiased.co.uk’s ‘Find an IFA’ service running on a partner website. To support this activity Unbiased.co.uk now regularly provides white label versions of its consumer guides, tools, microsites and podcasts to partner personal finance websites.

 

 

2.      Unbiased.co.uk’s product provider sponsors

AEGON Scottish Equitable Plc	Lockton
Alliance Trust	Lutine Assurance Services
AXA Life	MetLife
Bright Grey	National Savings & Investments
BPP	New Star Investment Funds
Canada Life Ltd	Norwich Union Life
Cardif Pinnacle	Prudential
The Children’s Mutual	Scottish Life
Clerical Medical Investment	Scottish Life International
Defaqto	Scottish Widows Plc
Friends Provident	Standard Life Assurance Company
The Hartford	Tomorrow
Invesco Perpetual	Unum
Legal & General	Zurich Intermediary Group
Lincoln

 

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