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UK debt levels rise again

15 September 2009 / by Andy Davies

Debt levels in the UK increased again in the second quarter of 2009, almost doubling the level of borrowing in the first quarter of the year.

According to unbiased.co.uk, a total of £5.5billion was borrowed by Brits in the second quarter of 2009 compared to £2.9billion in the first quarter.

However, savings levels have grown to £21billion after hitting a record low of £14billion in the first quarter.

But figures published by the professional advice website show that in spite of this increase, saving levels are 70 per cent lower this year than in the same period last year.

David Elms, chief executive of unbiased.co.uk, attributes this shift in savings attitudes to more people being prompted to repay personal debt, rather than save in the wake of the financial turmoil in 2008.

Mr Elms went on to say: "The first half of 2009, in contrast, has seen consumers head back down the debt path as they shift back into borrowing.  However, it is encouraging to see that Brits are beginning to save again, despite the low interest rate environment.

"After the topsy-turvy behaviour of financial markets and a deluge of contradictory reports on the economy in the media, it is not surprising that many consumers may feel uncertain about their financial standing."

Mr Elms urged consumers to monitor their finances carefully and for those who do have financial concerns to seek professional advice from an independent financial adviser (IFA), he added:

"Only an IFA will be able to help you strike the best balance between borrowing, saving and other financial aspects."

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