View more on these topics

Brits get the repayment bug

Repaying debt is in fashion, according to figures released by the Bank of England. The statistics show that Britons repaid more than £4bn in secured lending in Q4 2009.

It’s the seventh quarter in a row that the Bank’s equity withdrawal figure has been negative and should be compared with Q4 2003 when the country withdrew an additional £17bn in secured lending in the face of soaring house prices. The peak of equity repayment was in Q4 2008 when more than £7.1bn of debt was repaid.

It is widely believed that equity withdrawal has been used to support consumer spending in recent years. Conversely, net repayment of housing equity is adding to constraints on spending including high unemployment and stagnant or negative wage increases.

But until the economy improves consumers will continue to adopt a defensive position. They will minimise debt where possible in the face of potential unemployment and rising prices by taking advantage of low interest rates and repaying debt.

Recommended

Media Spotlight: The Big Short By Michael Lewis

Many claim to have predicted the financial crisis. With the benefit of hindsight economists, business commentators, academics and investors can all look back and say it was obvious that the crazy lending spree would come crashing down sooner or later. But in the line-up of professionals who claim to have predicted the crash how many […]

Free unemployment insurance for new mortgage customers at HSBC

HSBC is offering free unemploy-ment cover for new mortgage customers if life insurance is also taken out. The move follows the launch of HSBC’s split mortgage that allows borrowers to fix a proportion of their loan, with the remainder on a lifetime tracker rate. All borrowers are being offered unemployment cover if they take out […]

Offsets better than cash ISAs, says First Direct

First Direct says that in the past 10 years cash ISA savers who also hold a mortgage would have been £3,306 better off by placing their savings in an offset account.

Frexit & contagion risk in Europe

Many commentators have suggested that the UK’s exit from the European Union will trigger a domino effect, leading to its eventual break-up. Neptune’s Rob Burnett discusses the likelihood of this happening. Read more: Important information Investment risks Neptune funds may have a high historic volatility rating and past performance is not a guide for future […]

Newsletter

News and expert analysis straight to your inbox

Sign up