UK Takes (Some) Control Of Debt
Friday 23rd June
UK Takes (Some) Control Of Debt
- Net repayment of debt and buoyant savings levels provide indication of new financial restraint but...
- For every pound saved, we are borrowing 10 pence
It looks like saving is back in fashion in 2006 according to new figures* from IFA Promotion (IFAP), the organisation promoting the benefits of independent financial advice. IFAP’s Savings Brake report (which reveals the ratio of how much we are borrowing, not including mortgage debt, contrasted with how much we are saving) shows that in the first quarter of 2006, new borrowing dropped to the lowest level this century and for every pound saved, we are now borrowing just 10 pence, compared with 52 pence this time last year.
David Elms, Chief Executive of IFA Promotion, commented: “The nation appears to be reining in their debt and showing commitment to saving which, overall, is fantastic news to report. At first glance, it seems that consumers have started to develop joined up thinking when it comes to their budgeting behaviour, making the link between their spending, borrowing, saving and long term financial security, but this may not be entirely the case.
He continued: “Now is a period of much economic uncertainty and with a rise in interest rates hotly anticipated, consumers are simply behaving in the way you would expect - avoiding taking on new debts and piling what funds they have into savings. What we really need to see is a long-term change in people’s budgeting abilities and sustained financial pragmatism”
Evidence of a net repayment of secured debt, amounting to over 7 billion in January seems largely responsible for this change in budgeting behaviour. However, we are also taking on far less in terms of new borrowing - just a fifth of what we were at the end of 2005, and only a third of what we were this time last year. And, levels of new saving have remained consistently high for the last six months [please refer to Table 1 in notes to editors].
On the whole, the financial restraint of the UK consumer is much improved. Especially when you consider that less than three years ago, we were actually borrowing more than we were saving - 1.28 borrowed for every pound saved!
To take control of your spending and borrowing, claim your free copy of IFA Promotion’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. Visit www.unbiased.co.uk/getsaving or call 0800 085 3250
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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, AITC and IMA. With detailed queries on this analysis call Paul Hersey on 01737 342863
Table 1
‘Savings Brake’
| Borrowing (ex mortgages) m | Savings m |
pence saved |
2001 Q1 | 11,543 | 21,049 | 55p |
Q2 | 13,662 | 27,419 | 50p |
Q3 | 13,393 | 22,115 | 61p |
Q4 | 15,736 | 25,631 | 61p |
2002 Q1 | 18,190 | 23,087 | 79p |
Q2 | 18,560 | 28,655 | 65p |
Q3 | 21,434 | 20,993 | 102p |
Q4 | 20,026 | 27,045 | 74p |
2003 Q1 | 14,582 | 21,261 | 69p |
Q2 | 18,340 | 25,632 | 72p |
Q3 | 24,828 | 19,432 | 128p |
Q4 | 22,642 | 30,345 | 75p |
2004 Q1 | 20,602 | 20,019 | 103p |
Q2 | 19,994 | 29,075 | 69p |
Q3 | 19,662 | 23,983 | 82p |
Q4 | 17,316 | 32,724 | 53p |
2005 Q1 | 10,437 | 20,194 | 52p |
Q2 | 9,429 | 32,038 | 29p |
Q3 | 17,303 | 25,345 | 68p |
Q4 | 17,662 | 34,198 | 52p |
2006 Q1 | 3,112 | 30,060 | 10p |
For further information please contact:
David Elms | Liz Willder/Holly Godden |
Chief Executive | Lansons Communications |
IFA Promotion | 020 7294 3677 / 020 7294 3674 |
020 7833 3131 |
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For expert comment or case studies from over 200 media-friendly IFAs, journalists should call IFA Promotion’s Media Services hotline on
020 7294 3682 or search online in ‘Media’ at www.unbiased.co.uk
1. Independent Financial Adviser Promotion
IFA Promotion was established in 1989 to promote the value and accessibility of independent financial advice to the public. It represents around 9,000 firms of independent financial advisers across the UK and is sponsored by 31 leading financial institutions. In the past 12 months, over 530,000 consumers and businesses used IFA Promotion to find local independent financial advice.
IFA Promotion believes Independent financial advice should be:
Affordable. The option to take independent financial advice should be available, by right, to all- not just the wealthiest in society.
Convenient. IFAs should be available in the location of the consumer’s choice, wherever they live in the UK.
Transparent. It must be clearly transparent to consumers who is able to offer independent financial advice and who is not.
2. Independent Financial Adviser Promotion’s sponsors
Aberdeen Asset Management | Mortgage Express |
Abbey | National Savings & Investments |
AXA Life | NatWest Business Banking |
Bright Grey | New Star Investment Funds |
BUPA Health Services | Norwich Union Life |
Canada Life Ltd | Prudential |
The Children’s Mutual | Scottish Equitable Plc |
Clerical Medical Investment | Scottish Life |
Defaqto | Scottish Life International |
Friends Provident | Scottish Widows Plc |
GE Life | Skandia UK Group |
GMAC Residential Funding | Standard Life Assurance Company |
INVESCO Fund Managers Ltd | Unum Provident |
Legal & General | Webline Limited |
London Mortgage Company | Zurich Intermediary Group |
Lincoln Financial Group |
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