8 July 2008

Britons Reduce Savings as Credit Crunch Starts to Bite

New figures from Unbiased.co.uk, the Find an Independent Financial Adviser Search, show that consumer borrowing soared by £22.4 billion in the first quarter of 2008, £13 billion higher than during the same period in 2007.

Unbiased.co.uk’s Savings Brake* research, which reveals the ratio of how much we are borrowing, not including mortgage debt, contrasted with how much we are saving, shows that for every pound UK consumers saved during the first three months of 2008, they borrowed 69 pence. This is a notable increase from the 29 pence borrowed against every pound during the first quarter of 2007.

The research also reveals that as well as increasing borrowing levels, consumers also reduced savings – with the amount we added to our ‘rainy day’ funds dipping by £11 billion to £32.7 billion in quarter one 2008.

David Elms, Chief Executive of Unbiased.co.uk, commented: “2008 has started turbulently for many with regards to their finances.   Consumers are playing double jeopardy – not only increasing the amount they are borrowing, but also reducing the amount they are saving.   The early months of the year have traditionally revealed British consumers at their most financially stretched – the worry is that this year the scenario is even more bleak than normal.   We have increased our debt two fold since the same time last year – and reduced our savings.

“A bad situation is being made worse by the fact that – as the credit crunch bites, there is less credit around.   Over 10,000 mortgage deals have been withdrawn and personal loans are more expensive than last year – making it harder for people to find affordable credit.

“We need to take control and start managing debt better and putting some money away for the future if we are to see a significant improvement in the Savings Brake ratio in 2008. It has never been more important for people to take control of their finances to ensure their savings and borrowings remain at a healthy level.”

To take control of your spending and borrowing, visit www.unbiased.co.uk/getsaving 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/getsaving or calling 0800 085 3250.

-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 342863.

 

 

 

 

 

 

 

 

 

 

 

Table 1

 

Borrowing (ex mortgages) £m

Savings £m

‘Savings Brake’

pence borrowed for every pound 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

19,430

106p

Q2

19,994

29,135

69p

Q3

19,662

24,266

81p

Q4

17,316

32,885

53p

2005 Q1

10,437

20,194

52p

Q2

9,429

32,019

29p

Q3

17,303

24,788

70p

Q4

17,662

33,692

52p

2006 Q1

4,446

30,355

15p

Q2

18,661

38,363

49p

Q3

15,860

34,115

47p

Q4

9,579

34,604

28p

2007 Q1

9,665

33,227

29p

Q2

6,562

43,421

15p

Q3

10,439

33,631

31p

Q4

2,315

43,360

5p

2008 Q1

22,447

32,729

69p

 

-          ends –

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 call Unbiased.co.uk’s Media Services hotline on

020 7294 3682 or search online at www.unbiased.co.uk/bluebook

 

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 19th year, creates over 6,000 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 the online gateway between consumers researching their financial advice options 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 575,000 consumers have used Unbiased.co.uk’s  ‘Find an IFA search’, or one of the white labels, to find a local IFA – and 94% of these enquiries were dealt with online.

When searching for a ‘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

Abbey for Intermediaries

Lincoln Financial Group

Aberdeen Asset Management

Lutine Assurance Services

AEGON Scottish Equitable Plc

MetLife

Alliance Trust

National Savings & Investments

AXA Life

New Star Investment Funds

Bright Grey

Norwich Union Life

BPP

Prudential

Canada Life Ltd

Scottish Life

Cardif Pinnacle

Scottish Life International

The Children’s Mutual

Scottish Widows Plc

Clerical Medical Investment

Skandia UK Group

Defaqto

Standard Life Assurance Company

Friends Provident

Tomorrow

The Hartford

Unum

Invesco Perpetual

Zurich Intermediary Group

Legal & General

 

 

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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