Debt Statistics for March - The Calm Before the Storm
The British Banking Association (BBA) statistics are in for mortgages and unsecured lending in March, and they make for interesting reading. After the massive surge of borrowing in February, which saw the biggest monthly increase in unsecured borrowing in five years, it seems that either people have become more conservative or lenders have become more cautious – perhaps it is a little bit of both.
For credit cards, in March people actually paid off marginally more then they borrowed, with £7.4 billion being taken out and £7.5 billion of credit card debt paid off. Every silver lining has its cloud, however – despite these figures, due to interest and charges net credit borrowing still increased by £300 million. About £2.7 billion was taken out in loans, which is similar to previous months, and overdraft borrowing increased slightly. Overall, a quieter month compared to the February surge in borrowing.
Remarkably, March also saw the biggest increase in savings in a long time, with over £2.9 billion being invested in savings compared to the monthly average of £1.9 billion. Perhaps in anticipation of troubles ahead, people are banking as much as they can into savings whilst they still have the chance. Whatever the reason, bigger savings will provide many with the safety net to survive the uncertain future.
While March saw a significant boost in savings, mortgage rejection rates climbed to 46%, as the housing market worsens and new and existing homeowners struggle to secure new mortgages.
These statistics are only averages, and debtors experiences are will always be individual. It may be that it is the best off in the country who are responsible for the surge in savings rather than those who are truly struggling. Equally, the fact that borrowing has decreased may have more to do with banks rejecting customers than debtors growing more cautious. But the figures seem to suggest increased consumer caution in the face of anticipated problems, and it can only be a good thing that can only be a good thing as the economy remains unstable, and many ordinary families struggle to make ends meet.
