‘Recession sees Brits paying off debts’
May 22, 2009 at 3:59 pm
New research has shown that Brits are taking advantage of the economic crisis by making determined attempts to pay off at least part of their debts. New figures show that during 2008, Brits paid back almost £40 billion of non-mortgage debt. This figure is significant, since it represents the first time in the history of the research that a larger sum of money has been repaid than has been recorded as fresh borrowing. It seems as if savings have been sacrificed in this quest to repay debts, with many Brits choosing to change their saving habits at a time of economic uncertainty.
The last few months have forced many individuals in the UK, and indeed across the world, to take a fresh look at the state of their personal finances. Cutting back on non-essential expenses has become the norm for families in Britain and many people are also looking to relinquish control of financial investments which are not providing a stable or reliable return. For example, endowment policies are being cashed in, or indeed sold, in an attempt to impose a greater sense of control over personal finances.
Whilst officials responsible for releasing the results of this new research have not been surprised by the findings that Brits are choosing to pay off debt, they have been shocked by the extent of the trend. It is not unusual to see consumers sacrificing the habit of saving in favour of paying off personal debts but the impact of the credit crunch across the country has been confirmed by the manner in which this pattern has grown over the last few months.
