Financial site sees consumer refocusing in downturn

01/10/2009

Brits are more careful with their money now than they were before the credit crunch, a financial website indicated today (October 1st).

Andrew Hagger at Moneynet.co.uk said that rising unemployment had made people reprioritise their personal finances - cutting spending and increasing saving.

The comments follow the release of figures from the Office for National Statistics (ONS) earlier this week, which showed that the amount of income saved by the typical household in April-June 2009 reached 5.6 per cent.

By way of comparison, this ratio stood at just 3.9 per cent three months earlier.

Insecurity over personal incomes is also on the increase, with the jobless total in the UK rising to a 14-year high of almost 2.5 million over the three months to July.

Meanwhile, card and loan providers have significantly tightened their criteria for new borrowers in the recession - making it harder for people to take out credit even if they want to in the first place.

Mr Hagger added: "Previously people perhaps hadn't seen the need to save, but there have been an awful lot more people being made unemployed over the last 12 [to] 18 months.

"If it's not happened to their own family they probably know someone who perhaps wishes they had a bit of savings behind them. The whole recession has just focused people's minds a bit more on looking at their finances."

Figures from the Bank of England for August 2009 showed that the total amount of consumer credit outstanding fell by £0.3 billion over the month.

This means that Brits paid back more unsecured credit than they took out.

Tags; Budgeting Advice, Credit Card Lifestyle, Recent Graduate Debt,

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