Comsumer debt on rise in UK

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Britain’s level of debt increased again the second quarter of this year, with almost double the level of borrowing compared to the first quarter of 2009.

Consumers borrowed £5.5 billion between April and June, nearly twice as much as the £2.9 billion borrowed between January and March, said financial advice site unbiased.co.uk.

Savings levels grew to £21 billion in the second quarter, up from a record low of £14 billion in the first three months of the year.

Despite the rise in saving, the amount represents a 70% fall compared to saving levels in the year ago period.

Unbiased.co.uk said the drop in savings is due to an increase in the number of people choosing to pay off personal debt rather than save.

“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,” said David Elms, unbiased.co.uk chief executive.

He added that the UK risks “heading down the debt path again” unless consumers rein in their addiction to credit.

“However, it is encouraging to see that Brits are beginning to save again, despite the low interest rate environment,” he concluded

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