By Lois Avery
Repaying debt has become a priority for Brits for the first time in two years, according to new figures.
Unbiased.co.uk has found that consumers are choosing to pay off debts rather than borrow and at the same time are turning away from saving.
It’s thought that savings have taken a back seat following recent warnings that the UK economy recovery is slowing and a double dip recession may be looming.
As a result, Brits repaid £1 billion over and above what they were borrowing throughout the second quarter of this year. This is in stark contrast to the final quarter of last year, which saw Brits adding £16 billion to the debt mountain with 66p borrowed for every pound saved.
But because of the rush to repay debts savings have suffered, falling by nearly £8 billion over the second quarter of 2010, from £23 billion to £15 billion.
Despite the positive news that the nation seems to be paying off loans, credit cards and mortgages, Karen Barrett, chief executive of unbiased.co.uk is urging savers to keep putting something away for a rainy day.
"Brits appear to have shifted their financial habits to reflect those last seen at the height of the credit crunch, with debt repayment top of the priority list.
"For those who are in a position to save, no matter how little, it is important to ensure you are doing whatever you can to make your savings work hard - especially as interest rates remain static.”
