People Abandon Saving to Repay Debt

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The credit crunch crisis has triggered a dramatic retreat from savings last year, as for the first time since 2000, British consumers are paying off more than they borrowed.

Last January, consumers borrowed 66 pence for every pound they saved. However, when financial turmoil struck in the summer, there was a rapid turnaround and by the last quarter of 2008, we were paying off £1.76 of debt for every pound saved. New savings during this period almost halved. Over the course of 2008, £38.6 billion of non-mortgage debt was paid off - more than was borrowed in 2007 and 2008 combined! But, as a nation, we saved £103 billion - almost 30 per cent down on the savings figure for 2007.

For many people, the concept of “saving” is entirely alien in any event! Repaying debt is the obvious priority for almost everyone at present.Surveys have shown that we are tightening our belts all round in order to reduce our debt burden. A large part of that non-mortgage or secured debt is tied up in credit cards or personal loans. Managing those unsecured debts is a priority, especially with the employment situation worsening (and due to get even more dire as floods of school leavers enter the workplace later this year).However, many of those unsecured credit card, store card or personal loan debts may be unenforceable and could be cleared entirely.

Credit Issues is continuing the fight against lenders pursuing legally unenforceable debts on behalf of a growing number of clients. And with some success! So far during 2009 Credit Issues has successfully challenged over £1million worth of consumer credit card and personal loan debt with various high street names including the Co-op, Tesco, Royal Bank of Scotland, NatWest, Mint, Lombard Direct, Littlewoods, Direct Line as well as various debt collection companies.Tools are available to consumers which mean that, if agreements do not comply with the strict requirements of the Consumer Credit Act 1974, credit card or unsecured loans taken out prior to 6 April 2007 could be successfully challenged.So by all means look at minimising your saving ratio, but it’s worth investigating minimising your unsecured debt burden initially by contacting Credit Issues today. Find out how you could clear your unsecured debts and get back any mis-sold PPi into the bargain!

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