08 July 2008
Britons can not wait to take on more and more debt as the credit crunch puts people's finances under strain, according to new figures.
Unsecured borrowing, such as through credit cards, overdrafts and loans, soared to £22 billion during the first three months of the year, according to independent financial adviser website Unbiased.co.uk.
The rate at which people are taking on new debt is the highest since the final quarter of 2003, and more than double the £9.67 billion consumers borrowed during the first three months of 2007.
At the same time savings rates fell, with people setting aside £32.73 billion during the period, the lowest amount for two years.
Overall, for every £1 people saved during the first quarter they borrowed 69p, well up on a so-called savings brake of 29p during the same period of 2007.
Unbiased.co.uk, chief executive, David Elms said: "2008 has started turbulently for many with regards to their finances. 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. We have increased our debt two-fold since the same time last year - and reduced our savings."
He added that the situation was being made worse by the credit crunch, with fewer mortgages and loans available, while interest rates on debt were higher.
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