Britons save more than borrow

Britons are beginning to save more than they borrow, new figures suggest.

12:36 27 September 2005

Britons are beginning to save more than they borrow, new figures suggest.

Figures from IFA Promotion show that for every pound saved Britons borrow 27 pence. This represents the lowest level since IFA Promotion began collecting data in 2001.

IFA Promotion calculates the consumer "savings break" based on a ratio of savings levels against borrowing. The new figures suggest that Britons are beginning to act on calls to curb borrowing levels.

However, IFA Promotions have questioned whether this is anything more than a superficial behavioural change, suggesting that it may be motivated by monetary policy rather than attitudes.

"Increased commitment to regular savings is clearly good news, but it stems far more from recent interest rate moves than any sudden savings epiphany," said chief executive David Elms.

Mr Elms stressed the need for a more fundamental shift in attitudes towards budgeting. He also called on consumers to understand how their savings, spending and borrowing behaviour impacted on their long-term financial security.

The savings break of 27 pence is the healthiest since records began in 2001. Several quarters have seen Britons borrowing more than they saved. Borrowing hit a high in the third quarter of 2003, with consumers borrowing 128 pence for every pound saved.

Recent figures on consumer spending pre-empted the image of a more frugal UK. Figures released last week by the British Bankers Association showed that credit card borrowing fell in August for the second consecutive month.