New figures from
unbiased.co.uk, the professional advice website, has revealed that Q2 2011 has been a quarter of mixed news.
The figures show that savings continue to increase, although by £6 billion less than Q1 2011, while borrowing levels continue to decrease, a trend we've been seeing since 2008.
Unbiased.co.uk's Savings Brake research reveals the ratio of how much we are borrowing (including unsecured borrowing but not including equity release and mortgages) contrasted with how much we are saving. During Q2 2011, borrowers repaid 10p of debt in every pound they saved - a slight decrease from 11p in Q1.
The latest figures show that consumers are feeling an ongoing strain on their finances and are taking distinctive action to address this. While it's good news that debt repayments still outweigh current borrowings, a phenomenon first seen back in Q3 of 2008, the report reveals the amount we've paid back on our debts is the lowest since Q3 2009.
2010 saw a record year for consumers repaying their debts, reaching an all time high of repaying 30p in every pound saved during the first two quarters, while in comparison, 2011 so far has seen a dip in debt repayments.
At the same time we have seen savings levels continuing to increase overall, but in varying amounts quarter on quarter. Q2 of this year has seen an increase in savings levels by £18 billion - while new savings in the previous quarter were at £24 billion, the highest increase since Q2 2009.
Commenting on the figures Karen Barrett, chief executive of unbiased.co.uk, said "So far this year we have seen a contraction in debt repayments and a slow down in the growth of savings levels compared to previous quarters.
“It seems that rising inflation and living costs are taking their toll on consumers, leaving them with less disposable income to save. It is important for consumers to make sure they are making the right choices for their personal finances in the current economic climate, not just for the short-term but importantly for the long-term as well.”
