Spare cash being used to save, not pay off debt
TENTATIVE signs have emerged that some consumers are getting to grips with their debts.
New research shows there has been a fall in the number of householders using spare cash to pay off debts.
At the same time, there has been a rise in those saving any extra money they have, according to research commissioned by Nationwide UK (Ireland).
The building society says this may indicate consumers are starting to get debts under control and can go back to saving.
Four out of 10 people are now putting any spare money they have into savings accounts – the highest level since the Nationwide savings index was started in January 2010. But paying down debts continues to be the most likely use for spare funds, with 44pc saying they would use surplus cash to reduce debts, the research by the Economic and Social Research Institute shows.
Managing director of Nationwide UK (Ireland) Brendan Synnott said the savings index was showing tentative signs of improvement in the financial situation of consumers.
"Paying down debt remains the most popular action for spare cash. However, the gap between this and saving has narrowed significantly.. . . This may indicate that consumers are getting their immediate debt obligations under control and are refocusing on saving."