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Almost three quarters of Brits have steered clear of more borrowing since the recession hit, looking to save instead of spend during the downturn.

Fairinvestment.co.uk has found that Brits are steering clear of more borrowing. It found that the average debt on credit and store cards totalled more than £2,000, while the average loan not including mortgages, was in excess of £3,800 last August – but those figures have shrunk considerably.

But, as credit criteria and purse strings tighten, new research from Fairinvestment.co.uk has found that 74% of Brits have refrained from borrowing more money. This is good news – people are realising that 2009 is the year to save and batten down the hatches rather than keeping spending.

But of the remaining 26% of Brits who have borrowed more since the recession took hold, some have borrowed through more than one method. The research found that 7% of these have taken out an additional credit card while 6% have chosen to borrow money from friends and family. A further 5% have succumbed to another personal loan, while three per cent have turned to short term credit such as pay day loans.

Also, the website found that nearly one in ten people have got themselves into debt for the first time during this downturn, as 5% said they have had to get their first personal loan, while 4% have had to take out their first credit card.

Sharon Bratley, chartered financial planner at Fairinvestment.co.uk says: "The fact that the majority of people are steering clear of getting into further debt is encouraging, and a sign of the changing economic climate.

"Not long ago, people thought nothing of getting another loan or credit card, as credit was easier to secure, but as lenders tighten their criteria it seems people are taking note.It is also encouraging that more than a quarter of Brits would use any extra cash to pay off existing debts, as this should be a priority for those who can afford it and are not experiencing financial difficulties."

SOURCE: Fairinvestment.co.uk, 30/04/09

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