Stat of the day: £377m

Brits are paying off record amounts of debt. In December last year, £377m was wiped off the debt slate as people raided their savings to settle loans and overdrafts.

by Rebecca Burn-Callander
Last Updated: 09 Oct 2013

Has someone leaked a few prudence pills into the water system? Apparently not.

The combined effects of double-dip recession scare-mongering, the sad state of savings (not much doing with interest rates at 0.5%), rising unemployment, and the cost of paying off charges on credit cards and loans has spurred the people of the UK into action. People are cracking into those nest eggs and seeking a debt-free life.

During one month alone, we paid off more personal deficits than ever before (well, since records began, says the Bank of England), including £16m on credit cards and store cards. A U-turn on our previous spending habits, which saw the UK notch up £400m of personal debt in November (MT reckons it was those early Christmas shoppers).

Instead, consumers took out £100m of savings in December, according to the Buildings Societies Association (BSA). Director-general Adrian Coles said: 'It is clear that savers are still struggling to save as much as they would like, or are choosing to use spare cash to pay down debt instead.'

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