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YOU ARE HERE: Home > News > 2005 > More Borrowers Plan to Reduce Their Debts |
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More Borrowers Plan to Reduce Their Debts49% of people with debts say they plan to cut their borrowing over the next six months, according to the latest Consumer Sentiment Report from the Nationwide building society, a 7 percentage point jump from last month and a massive increase from the mere 16% who were planning to cut borrowing six months ago. Whilst people don’t expect to save more, the report reveals, they do intend to spend less and use the increased disposable income to reduce their debt. "It is encouraging that consumers appear to be taking a responsible view of borrowing and more people appear to be planning to reduce their level of household debt.", said Stuart Bernau, Nationwide's executive director, commenting on the figures. The five interest rate rises between November 2003 and August 2004 seem to have had the desired effect in encouraging those with debts to focus more money on repaying what they owe. The rising rates have not dampened views on how the economy or housing market will perform over the next six months as confidence remained positive. There was a concerning negative in the figures. The number of those struggling with making debt repayments continues to rise. According to Nationwide, the number has been gradually increasing for the last six months with 7% of those surveyed this time reporting that they usually struggled to meet their debt repayments, a massive increase from the 2% figure for June 2004. As for any Christmas debt hangover, people are generally confident about their ability to pay off what they borrowed for the festivities, the study of 1000 people revealed. Half (51%) of consumers expect to have finished paying for Christmas within a month of the end of the celebrations. Another 29% expect to have paid everything off by the end of March, in time for Easter. This still leaves 19% who expect to have outstanding Christmas debt outstanding at the start of April, with 8% anticipating that they will still to be paying for Christmas at the end of June and 1% who do not expect to have repaid their 2004 Christmas debt before 2006.
Published Wednesday January 12th 2005 |
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