UK Savings Hit Record High

UK savers are putting away record levels of cash, according to a new study.

However, although Britons are saving higher sums than ever before, they are also borrowing an average of 48p for each pound saved.

The UK's total savings pot soared in the second quarter of 2006 to more than 38.6 million, the highest level this century, IFA Promotion reports.

The independent financial advice agency estimates that consumers in Britain are continuing to take on more consumer debt, with 48p borrowed for every pound saved between April and June this year.

David Elms, IFA Promotion chief executive, said: "People are beginning to take heed of repeated calls to start saving but seem to be eliminating spending and borrowing behaviour from their budgetary considerations. The simple fact is that if we don’t stop borrowing money, the positive effects of saving will be negated."

Commenting on the IFAP Savings Brake, Mr Elms added that it was "very disappointing" following figures for the first quarter which suggested that just 16 pence was being borrowed for every pound saved and warned that consumers were threatening to negate the benefits of saving.

"This quarter’s results therefore only go to show that the economy is in a state of flux and that a sensible budgeting mantra is yet to be embedded in the British psyche," he concluded.

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