Abacus Daily Debt News

Reduced consumer spending down to sustained debt fears?

Individuals may be reducing their outgoings in an attempt to stave off debt fears, new figures have suggested.

The latest consumer credit figures from the Finance and Leasing Association (FLA) revealed people used eight per cent less credit in the 12 months leading up to May than they did during the same period in before May 2009.

According to the organisation, this implies consumers are reluctant to make credit commitments before seeing what happens in the wider economy.

The statistics found taking out unsecured loans dropped 45 per cent, while opting for a second-charge mortgage plummeted 67 per cent.

Fiona Hoyle, head of consumer finance at FLA, noted: "In uncertain economic times, consumers want to take even more control over their financial commitments."

The Consumer Credit Counselling Service recently claimed debt problems are adversely affecting people’s health, personal relationships and ability to adequately perform in the workplace throughout the UK.

By James Francis