UK consumers break savings records

UK consumers put a spectacular £136 billion away for a rainy day in 2006, up £25 billion on the previous year, according to figures from Unbiased.co.uk, the organisation promoting the benefits of independent financial advice.

However the latest research reveals that despite saving their pennies UK consumers continued to increase their borrowing as well. Unbiased.co.uk’s Savings Brake - which reveals the ratio of how much we are borrowing, not including mortgage debt, contrasted with how much we are saving - has dropped significantly – for every pound UK consumers save they are now borrowing only 40 pence, compared to 52 pence during the same period in 2005.

David Elms, Chief Executive of Unbiased.co.uk, commented: “The news that UK consumers are breaking records for saving is very encouraging, but the fact remains that the good work is wasted because debt continues to rise.”

The £39 billion saved between October and December in 2006 represents a 16% increase on the previous quarter, and is the highest quarterly figure of 2006.

Elms continues: “2006 was a record-breaking year for UK savers, but the savings brake ratio still continues to hover around the 40 pence mark which is a far less promising story. Personal debt in the UK continues to rise and, as such, all the conscientious effort being made on the savings side is being undone by continued increasing usage of credit cards, loans and overdrafts.”