For the first time in more than 15 years, Britons are beginning to pay off their credit card debt as the recession forces them to become more financial savvy.
According to official government figures, levels of unsecured debt from loans and credit cards fell last month for the first time since April 1993.
British workers are making their salaries stretch further each month by savvier spending and by better debt management, according to a new survey by Abbey.
The study revealed that the average monthly wage of £25,100 now goes 7% further for most Britons, as people cut back on daily essentials in order to tackle their debts or save during this time of financial instability.
New figures released by the Financial Services Authority (FSA) have revealed that mortgage arrears have increased by almost a third, as the British public struggles with its debt management.
The data shows that at the end of 2008, 377,000 UK mortgage accounts were in arrears by at least 1.5% of their loan balance – equivalent to around three months’ worth of repayments.
Spring cleaning your spending habits could prove the key to alleviating your debt, or help you save towards a significant purchase.
According to a survey by Halifax, first time buyers (FTBs) could add an extra £147 each month towards a potential home deposit just by taking control of their day-to-day spending.
Conservative politician George Osborne has warned Britons that they need to get back into the habit of saving money in order to fight the cycle of debt affecting the country.
In a speech to the Birmingham Chamber of Commerce, Osborne said that people in the UK must learn to save for their retirement, and they should also save up a deposit before thinking about getting onto the property ladder. “The ‘money for nothing ‘society has to end. The age of irresponsibility is over,” he warned.
The Institute of Financial Planning (IFP) has urged consumers to go ‘back to basics’ in their approach to household finances in order to avoid unnecessary debt.
Following this month’s interest base rate reduction to 0.5%, the IFP has claimed that low rates will make little positive effect on the bank balances of the British public, and that people should use any money saved by the decrease to reduce their debts rather than go on a spending spree. Debt management is extremely important and everyone should regularly check their finances.
