Britons step on the savings brake

UK consumers borrowed 41 pence for every pound they saved in the first quarter of 2007, according to Unbiased.co.uk’s latest Savings Brake figures, which reveal the ratio of how much we are borrowing, not including mortgage debt, contrasted with how much we are saving. This is not only a jump from the 35 pence we saw in Q4 2006, but it is also significantly higher than the average for 2006, where we borrowed an average of 36 pence for every pound saved.

UK consumers took out almost £15bn worth of secured and unsecured debt in the first three months of 2007, nearly £100m more than in the last quarter of 2006, according to new figures from Unbiased.co.uk, the find an independent financial adviser service.

More worryingly, it seems Christmas spending has hit consumers hard and Britain is now left counting the pennies. The first quarter in 2007 saw savings rates drop to £37bn, down a whopping £6 billion compared to Q4 2006.

David Elms, Chief Executive of Unbiased.co.uk, commented: “It is worrying to see that savings rates have dropped by £6bn compared to last quarter. People need to realise that their savings are a crucial part of their financial planning and that the amount they save should act as an emergency fund to cover their outgoings and borrowings.

“Last year was a record-breaking year for UK savers, with an increase of nearly £150bn in the amount saved in total by UK consumers, but the Savings Brake ratio has now moved back up above the 40 pence mark. Personal debt in the UK continues to rise and, as such, all the conscientious effort being made on saving money is being undone by continued increasing usage of credit cards, loans and overdrafts.”

To take control of your spending and borrowing, visit unbiased.co.uk/getsaving to download your free copy of Unbiased.co.uk’s dedicated guide - Join the Savings Revolution - which looks at how you can budget to save more, and options of where to put any extra money. You can also obtain details of local independent financial advisers to talk though the most suitable savings options for you by visiting unbiased.co.uk/getsaving or calling 0800 085 3250.