Brits eager to repay their debts?

People in Britain may soon seek debt management help as it has emerged many individuals are keen to pay back what they owe.

This is according to new research carried out by unbiased.co.uk, which found UK residents are dipping into their savings in an effort to relieve themselves of debt.

The website warned this behaviour was last seen at the beginning of the recent financial downturn and could be a result of economic reports suggesting a double-dip recession.

According to the study, Brits have slashed their rate of savings and are currently paying back more debt than they are borrowing – a trend that was last witnessed in the fourth quarter of 2008.

People are currently repaying seven pence for every £1 they saved in the second quarter of 2010, with the amount of cash placed aside in this period falling by £7 billion when compared with the first quarter of this year.

In quarter two, individuals repaid a combined £1 billion over and above what they borrowed.

However, in the final quarter of last year, Brits acquired an additional £16 billion to the overall debt as they took out 66 pence for every £1 saved.

Karen Barrett, chief executive at the website, noted: “For the first time since 2008, consumers are now paying off more debt than they’re borrowing – however this has inevitably also resulted in a drop in savings levels.”

Recent figures from PayPal’s annual UK Online Retail Report revealed many Brits have turned into bargain hunters, with 88 per cent of consumers admitting they regularly seek discounts and special offers.

By Joe Shervin