UK’s good saving habits undone by lingering culture of debt

In the third quarter of 2006, the UK tucked away almost £32 billion according to new figures from Unbiased.co.uk.

The latest Savings Brake from Unbiased.co.uk (which reveals the ratio of how much we are borrowing, not including mortgage debt, contrasted with how much we are saving) reveals that UK consumers saved more than £31.7 billion between July and September 2006. However, despite understanding the importance of saving, consumers are continuing to rely on borrowed money, and for every pound saved are borrowing 49 pence.

David Elms, Chief Executive of Unbiased.co.uk, commented: “Consumers are beginning to sit up and take notice of the increasing calls to save, however they are compromising these positive steps by continuing to borrow money to accommodate spending habits. Until people take responsibility for their debt then the benefits of saving will be diminished.”

He continued: “It is disappointing that consumer trends are failing to move in the right direction. When we reported on the first quarter of 2006 we saw that UK consumers were borrowing only 18 pence for every pound saved, and there was evidence of a net repayment of debt. However 2006 has seen consumers borrowing 54p and 49p for every pound saved throughout the second and third quarters respectively. This demonstrates that although people are recognising the need to save more they may not be budgeting to avoid taking on new debt.”