Britain’s savings level crunched by recession

New research from unbiased.co.uk reveals that savings plummeted in mid-2008, from around £39 billion to £20 billion, and haven't recovered since - making them a major victim of the credit crunch.  The latest figures show people are now saving just over £16 billion.

Unbiased.co.uk's Savings Brake research reveals the ratio of how much we are borrowing (including unsecured borrowing and equity release but excluding mortgages) contrasted with how much we are saving.  The latest figures reveal that Brits are now borrowing 37p for every pound they save.  This is a dramatic change from mid-2008 where Brits were instead repaying £1.67 of their debts for every pound they saved.

While debt levels are now much higher than they were in mid-2008, latest figures show they have dropped since the end of 2009.  Overall, Brits are currently now borrowing just over £6 billion, which has fallen from £14 billion at the end of 2009.  New savings are now just over £16 billion, after falling from over £24 billion at the end of 2009.

Karen Barrett, Chief Executive of unbiased.co.uk, comments: "Brits appear to have started 2010 with a tighter grip on their finances, as they are not borrowing as much as they were in 2009, even though this has resulted in a drop to savings levels. With interest rates still at an all time low and inflation on the up, it is important for people to ensure they are making their savings work hard for them, no matter how little they can afford to put away. 

"In order to ensure they are making the right choices with their money, it is vital that consumers seek professional advice from an IFA to strike the best balance between borrowing and saving.  An IFA can look at your overall financial position and recommend products from the whole of the market to guide you through.   You can carry out a free and confidential search to find an independent financial adviser near you by visiting unbiased.co.uk."