A specialist site has identified a 'repayment trend' among UK consumers, following close analysis of saving and borrowing figures.
Britons have shifted their financial priorities and are paying back their current debts instead of borrowing more money, a report from an Independent Financial Advisers (IFAs) group has revealed.
A report from industry website Unbiased.co.uk, released today, shows a profound shift in peoples' financial habits over the past year. Over January-March 2008, the typical Briton was found to be borrowing 66p in cards, mortgages and loans for every £1 they saved - but in October-December, this balance changed to £1.76 of repayments for every £1 saved.
Unbiased.co.uk also showed that total savings levels among consumers had dropped in 2008, falling 30 percent from 2007 to £103 billion.
The main reason for these trends has been the credit crunch - which has led to restricted credit criteria from lenders, rising unemployment and an economic downturn of a severity unmatched in decades. Increased insecurity about personal finances generally leads to more conservative financial habits.
David Elms, chief executive of Unbiased.co.uk, commented: "2008 was a year of two halves in terms of people's financial behaviour. The financial turmoil which hit Britain last summer prompted a dramatic retreat from savings in favour of starting to pay down personal debt.
"This shift itself is no surprise, but its severity confirms the historic impact of the credit crunch on consumer behaviour and evidence suggests this repayment trend is continuing at pace."
