Many Britons are prioritising paying back their debts, according to the Bank of England.
Consumer credit borrowing fell by a net £500 million during October 2009, in a trend which could have positive knock-on effects for the equity release sector.
The institution’s report showed that a £134 million increase in credit card borrowing was cancelled out by a £713 million decline in other types of consumer credit, including personal loans and car loans.
This in turn suggests that many people are trying to get back on an even financial keel by reducing their outgoings.
Howard Archer, chief UK and European economist at IHS Global Insight, commented: "The record, and fourth, successive net repayment in consumer credit in October is clearly the consequence of many consumers’ desire to reduce their debt, low demand for credit and a lack of availability of unsecured credit from banks."
Third quarter figures from Key Retirement Solutions have previously suggested that clearing debts is one of the principal customer motivations for taking out an equity release plan.
Over the three-month period, 36 per cent of new customers said that they would use the plans for this purpose.
Posted by Richard Planner
