7 July 2008

Britons Reduce Savings as Credit Crunch Starts to Bite

• New consumer borrowing at four year high
• Debt levels increased again in Q1 2008 by £22 billion
• Savings levels reduced in Q1 2008 by £11 billion
• For every pound saved in the last quarter, the British public borrowed 69 pence
• Visit www.unbiased.co.uk/getsaving to take control of your finances and help the UK continue to Get Saving!

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   Over 10,000 mortgage deals have been withdrawn and personal loans are more expensive than last year – making it harder for people to find affordable credit.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.

-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

 

 

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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 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 19^th 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
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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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