Debt consolidation continues to be a prominent feature of the way consumers are dealing with their finances, but the recent squeeze on incomes is redu…
Debt consolidation continues to be a prominent feature of the way consumers are dealing with their finances, but the recent squeeze on incomes is reducing this, new research has suggested.
The study by consumer website Unbiased.co.uk indicated Britons paid back 10p for every pound they saved in the second quarter of 2011 and the quarterly lending total was £1.7 billion, compared with £2.1 billion in the first three months of the year.
Such a dip in borrowing was a continuation of a trend the site says has been continuing since 2008, but the actual amount paid back now is at its lowest since the third quarter of 2009.
While this fact may be put in the context of 2010 seeing the largest net repayment yet measured, the fall in real incomes has had a clear effect, chief executive of the site Karen Barrett said.
She remarked: “So far this year we have seen a contraction in debt repayments and a slowdown in the growth of savings levels compared to previous quarters. It seems that rising inflation and living costs are taking their toll on consumers.”
The problems of personal debt are a key part of Britain’s economic woes, which have arisen from an over-reliance on debt at all levels, according to chancellor George Osborne.
In a speech to Lloyds of London this week, Mr Osborne said that while this was an international problem, Britain was one of the most guilty of taking this approach and having “the most indebted families” was part of this problem.
Posted by Paul Thacker