Debt reduction becoming a priority
Debt reduction becoming a priority
- Monday, 29 June 2009More people are looking to clear their debts rather than save, according to the Building Societies Association (BSA).
The comments follow news from the BSA that savings balances held by building societies dropped significantly in May this year compared to May 2008.
Building societies' savings balances reduced by £106 million this May, compared to a £1,162 million increase in May last year.
This is a result of a net withdrawal of £494 million in May 2009, compared to a net inflow of £855 million one year previously.
Adrian Coles, director-general of the BSA, said: "There is evidence that households are looking to repay debt rather than save.
"It is possible there will be a net withdrawal (before interest credited) from the total UK savings market in 2009."
The BSA also stated that gross mortgage lending was down year-on-year by 57 per cent in May 2009, from £3,530 million to £1,515 million.
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