Britons choosing to dip into savings to pay off personal debts
Published: 01 February 2012
An increasing number of British consumers are choosing to snub credit cards in favour of paying off personal debts with life savings.
Amid fears of a double-dip recession an all-time high of £377 million was paid off personal debts in December. Meanwhile credit spending levels fell dramatically by £400 million – the most since records began back in 1993.
New figures revealed £100 million was plucked from building societies as consumers dipped into savings rather than weigh themselves down with additional credit to cover spending over the festive period.
Howard Archer, chief economist at Global Insight, believed record repayments of personal deficits could be attributed to concerns over the nation’s economy and personal job security.
"It is notable that, even at Christmas, consumers were keen to keep down their borrowing," he said.
Adrian Coles, director-general of the Building Societies Association, also revealed many UK consumers are choosing to use what little cash they have left over to keep debt to a minimum.
"Savers are still struggling to save as much as they would like or are choosing to use spare cash to pay down debt instead," he said.
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Categories: Credit Cards, Savings & Banking, Loans & Debt, Prepaid Cards, Prepaid Mastercard