20 June 2007

Britons Step On The Savings Brake (Consumer)

UK consumers borrowed 41 pence for every pound they saved in the first quarter of 2007, according to Unbiased.co.uk’s latest Savings Brake* figures, which reveal the ratio of how much we are borrowing, not including mortgage debt, contrasted with how much we are saving. This is not only a jump from the 35 pence we saw in Q4 2006, but it is also significantly higher than the average for 2006, where we borrowed an average of 36 pence for every pound saved.

UK consumers took out almost £15bn worth of secured and unsecured debt in the first three months of 2007, nearly £100m more than in the last quarter of 2006, according to new figures from Unbiased.co.uk, the find an independent financial adviser service.

More worryingly, it seems Christmas spending has hit consumers hard and Britain is now left counting the pennies. The first quarter in 2007 saw savings rates drop to £37bn, down a whopping £6 billion compared to Q4 2006.

 

David Elms, Chief Executive of Unbiased.co.uk, commented: “It is worrying to see that savings rates have dropped by £6bn compared to last quarter. People need to realise that their savings are a crucial part of their financial planning and that the amount they save should act as an emergency fund to cover their outgoings and borrowings.

“Last year was a record-breaking year for UK savers, with an increase of nearly £150bn in the amount saved in total by UK consumers, but the Savings Brake* ratio has now moved back up above the 40 pence mark. Personal debt in the UK continues to rise and, as such, all the conscientious effort being made on saving money is being undone by continued increasing usage of credit cards, loans and overdrafts.”    

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

30p

Q3

17,303

24,788

70p

Q4

17,662

33,692

52p

2006 Q1

5,393

30,355

18p

Q2

17,118

38,320

45p

Q3

15,860

34,074

47p

Q4

14,832

42,484

35p

2007 Q1

14,914

36,802

41p

 

For further information please contact:

David Elms

Nicola Hussey/Anna Schirmer

Chief Executive

Lansons Communications

Unbiased.co.uk

020 7566 9718/ 020 7294 3605

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/media

 

1.      Independent Financial Adviser Promotion

Unbiased.co.uk is the consumer brand of IFA Promotion, the organisation 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, incorporating over 17,000 registered individuals. These individuals hold over 20,000 incremental qualifications which are each individually verified by the awarding body. IFA Promotion welcomes the prominent display of incremental qualifications and further developments into the credentials of independent financial advice.  

IFA Promotion is sponsored by 29 leading financial institutions, and in the past 12 months, over 600,000 consumers and businesses used unbiased.co.uk to find local independent financial advice.

IFA Promotion believes Independent financial advice should be:

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