Brits paying off credit card debt, neglecting savings

British consumers are paying off their credit card and unsecured debts but are putting less money into their savings accounts even as the British Bankers Association (BBA) noted an increase in lending to home buyers in November.

Data released by the BBA showed that loans for house purchases jumped to £6.6 billion in November, up from the £6.1 billion recorded in October. The figure was also more than double the amount approved in the same period last year as the global economic crisis hit the UK.

At the same time, UK banks said that the Brits paid off £5.9 billion of credit card charges, or £100 million more than they borrowed. However, net lending for personal loans and overdrafts dropped by £500 million.

David Dooks, BBA director of statistics said, “Household priorities are showing up in the November figures.”

He added that the demand for personal loans dropped in November and the Brits are paying off debt while some are trying to build up on their savings accounts to mitigate the effects of the recession.

British consumers deposited £1.4 billion into their savings accounts in November, down from the £3 billion deposited in October.

Remortgaging and equity withdrawal lending remained at low levels, however, and total mortgage lending was down 12 percent compared to a year earlier, the BBA said.