We’re pretty sure that this won’t come as surprising news to many of you; our borrowing is on the up and our savings are on their way down.
Recent figures have shown that consumer borrowing has soared to £22.4billion in the first three months of 2008; that’s a rise of £13billion on the same period in 2007!
It’s clear that debt is something we have a torrid affair with isn’t it?
The Savings break survey, carried out by unbiased.co.uk, which promotes independent financial advisers, also said that our consumer saving fell by £11 billion to £32.7 billion.
No surprise as most of us who have savings are having to dig into them just to make ends meet aren’t we?
That saw the savings break - the ratio between how much consumers are borrowing (on credit cards, overdrafts and loans, but excluding mortgages) and saving - climb to 69p borrowed for every £1 saved.
This compares to 29p in the same period last year, as we saddle ourselves with more debt to meet the rising cost of living, despite tighter lending conditions.
(Source:Credit Action)
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David Elms, chief executive of unbiased.co.uk, said:
"Consumers are playing double jeopardy; not only increasing the amount they are borrowing, but also reducing the amount they are saving. The early months of the year have traditionally revealed British consumers at their most financially stretched; the worry is that this year the scenario is even more bleak than normal."
Elms said that debt had increased two-fold since the same time last year, and that consumers had reduced their savings. He warned:
"A bad situation is being made worse by the fact that, as the credit crunch bites, there is less credit around. Over 10,000 mortgage deals have been withdrawn and personal loans are more expensive than last year, making it harder for people to find affordable credit."
Have you stopped saving and taken on more credit just to get by?
Was this the only option available to you?