Britons are borrowing an increasing amount of money, new
research shows.
In the latest Savings Brake study carried out by Unbiased,
lending through the likes of credit cards, loans and
overdrafts accounted for some 11.7 billion pounds between
July and September, a figure about double of that recorded
during the preceding quarter. Meanwhile, findings from the
firm also indicated that savings decreased by more than 11
billion pounds over the course of the third quarter of
2007. Overall, for every pound the typical Briton saved
during the third quarter of the year, some 35 pence was
borrowed. According to the company this represents a
"significant increase" from the 13 pence per pound borrowed
during the previous three-month period.
According to the company, the recent climate of high
interest rates has seen many Britons dip into their savings
accounts or take out a loan in an attempt to help cope with
various financial constraints over the summer, including
holidays. In addition, the credit crunch and its subsequent
impact on the availability of cheap UK loans was also
reported to have had an impact on consumers' capacity to
handle their money.
Commenting on the figures, David Elms, chief executive of
Unbiased, said: "We have seen a lot of activity in the
financial markets in the third quarter of 2007, which
marked the beginning of the Northern Rock crisis. Interest
rates over the summer were still at a high level of 5.75
per cent and many people will have felt the impact of the
credit crunch starting to bite their disposable income.
"While the high level of borrowing and a drop in savings
for this quarter may come as no surprise, it is a worrying
development. And with the cost of Christmas about to hit
the nation's pockets over the next couple of months it is
unlikely that we will see a significant improvement in the
Savings Brake ratio."
As a result, Mr Elms advised it is crucial that consumers
take the time to take steps to take control of their
financial situation. And that their level of savings and
borrowing, whether this is through loans, plastic cards or
other means, remains at "a healthy level".
For those concerned about either their ability to save
adequately for later life or about the level of money owed
in personal loans, overdrafts, store cards and other forms
of borrowing, taking out a loan for debt consolidation
purposes may prove to be useful. And applying for such a
loan may be useful for a rising number of people. A recent
study carried out by Alliance & Leicester showed that
following the series of interest rate increases since
August 2006, households are feeling "less comfortable" in
managing various areas of their finances, as the subsequent
rise in mortgage costs impinges upon their ability to pay
back loans and other monetary demands.
The study also indicated consumers put just 2.1 per cent of
their salary into a savings scheme during the first quarter
of this year, a record low. Although this proportion
increased to 3.1 per cent between April and June, the
financial services firm stated that is still below the
decade-average of six per cent. As a result, applying for a
cheap consolidation loan could help consumers drastically
reduce their borrowing and free up more money to invest
into savings accounts.
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Abbi Rouse writes for All About Loans where visitors can
apply online for cheap UK loans. We also specialise in
poor credit loans, and cheap consolidation loans. Visit
today http://www.allaboutloans.co.uk/
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