SAVINGS in the UK have plunged by a whopping £19 billion over the last quarter, as Britons pay off £23 billion of their debt mountain, according to data from Unbiased.co.uk.

Britons paid off £1.24 of debt for every £1 saved in the last quarter, as our focus shifts to reducing debt for the first time since the study started eight years ago.

But savings are being sacrificed to pay for our debt excess, with savings levels almost halving over the last quarter to an all-time low – from £38.5 billion down to just £19.3 billion. This is in stark contrast to the previous quarter, when for every pound saved, Britain borrowed 15p.

David Elms, Chief Executive of Unbiased.co.uk, said: "This has been a turbulent year in terms of finances and these figures are unprecedented.  Britons appear to have taken drastic actions in an attempt to reduce their debt levels. For the first time in our research the nation has actually focused on paying off debt rather than accumulating even more.

"But like everything, this trend has left its mark on consumer finances. With such a focus on paying off debt, the UK savings levels felt the repercussions and dropped to an all time low.

"Especially in the current interest rate environment for many people the decision on whether to prioritise their savings or service their debt can be a difficult one to make. An independent financial adviser (IFA) can help with this decision and make sure people make the best choices for their personal finances not just in the short term but also with long-term goals in mind."

Alison Steed