UK Puts The Brakes On Debt According To New Figures

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·         But for every pound saved we are still borrowing 55 pence

Debt could be falling out of fashion in 2005 according to IFA Promotion, the organisation that promotes the benefits of independent financial advice with new borrowing figures down to the lowest level since 2001. However, despite this new sign of financial restraint, there is no evidence of a boost to savings: IFAP’s quarterly Savings’ Brake report (the ratio of how much we are borrowing, not including mortgage debt, contrasted with how much we are saving) shows we are still borrowing 55 pence for every pound we save.

The Savings’ Brake figures reveal a 44% drop in new debt levels compared to this time last year and with credit card debt specifically falling for the first time since 1994** it seems that we might finally be trying to live within our means. High street spending has also fallen for the last two months in a row*** but we are still failing to get saving: the amount we save nationally has also fallen since the last Savings’ Brake report. Therefore over half of our savings are still negated by the new debt we are continuing to take on.

David Elms, Chief Executive of IFA Promotion, commented, “Falling debt levels is always going to be good news but we would really like to see a big commitment to regular savings. Recent figures suggest a move away from the UK’s ‘head in the sand’ attitude to spending and borrowing but the savings’ brake shows that a distinct lack of joined up thinking remains. People are cutting back on their bad financial habits but they need to take some positive steps if they are going to have a financial secure future. Interest rates are still historically low and some people predict further cuts this year so would-be savers should visit a local independent financial adviser who can suggest the best ways to get high returns on their investments.”

To help people take control of their finances, IFA Promotion has produced a free 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. Call 0800 085 3250 or visit www.unbiased.co.uk/getsaving.

-ends-

*According to independent analysis of the most recent official figures conducted by independent agency, RAKM, on behalf of IFA Promotion.  Data sources are ONS (average earnings), Bank of England (unsecured debt levels), industry data and consumer research (number of loans and credit cards held).  With detailed queries on this analysis call Paul Hersey on 01737 216 940.

**BBA figures May 2005

***British Retail Consortium Figures June 2005

For further information please contact:

David Elms                                               Chloe Merriman

Chief Executive                                        Lansons Communications

IFA Promotion                                          020 7294 3681

020 7833 3131

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 Services’ 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 30 leading financial institutions. In 2004, over 440,000 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

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