Britons repaying record amount of debt

The latest figures from the Bank of England have shown that the amount of unsecured debt owed by Britons has fallen for the first time since records began sixteen years ago.

Borrowers paid off £245 million of unsecured debt, made up from personal loans, credit cards and overdrafts, in February, making the first net reduction in the amount owed since 1993.

Economists have been surprised by the statistics, although many have advised consumers that paying off debts is more beneficial than saving as interest rates have fallen so low. Managing their finances has now become a priority for overstretched households.

Official figures released last week also showed that consumer spending over the last three months has dropped by the greatest amount for 30 years, possibly heralding the end of the “spend, spend, spend” culture that has been blamed for the UK’s excessive levels of personal debt.

Article sourced from www.debtmanagementtoday.co.uk 31st March 2009