Debt rising as savings are falling
Debt levels have risen by almost £800m compared to the second quarter of last year, according to Unbiased.
The IFA search engine added that saving levels are down by more than £4bn in the same period.
The research shows that for every pound UK consumers saved during the second quarter of 2008, they borrowed 15p, not including mortgage debt. This has increased from 12p borrowed against every pound during the second quarter of 2007.
The amount consumers added to their rainy day funds dipped to £38.5bn from £42.9bn in the same period last year.
David Elms, chief executive of Unbiased, said that with the credit crunch firmly gripping financial markets it is important for consumers to take control of their finances.
He said: “People are currently feeling the pinch – but this will only continue to get worse if they are both increasing the amount they are borrowing and reducing the amount they are saving.
“It is crucial that people take action now and make sure that they are taking control of their finances. Reigning in on spending and making sure that your savings are working hard for you are only the start of kick starting your finances.”
John Blackwood, an IFA for London-based Virtue Financial, said: “It is nothing new. Some 50 years ago people would have waited until they had the money before they went out and spent, now they do not wait and do not think about the consequences.”
