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Ups and downs

Britons are repaying their debts at a slower rate and instead concentrating on building up savings, a new report has revealed.

During the first three months of this year, credit card, personal loan and overdraft borrowings was reduced by £1.83 billion – the lowest rate since 2009.

At the same time savings rose by the highest level since 2009, with people setting aside a total of £26.93 billion, up from £21.1 billion.

The rise was attributed by unbiased.co.uk, authors of the report, as being a result of the poor economy and the climate of uncertainty over jobs leading people to stash away more cash, with the prospects of rainy days ever more likely.

Karen Barrett, the website's chief executive, said: 'It is extremely encouraging to see the level of savings increase at the start of this year and it's certainly an interesting turnaround from the previous quarter.

'We have to ask why people are saving more but paying off less debt. It seems that a rainy day fund is proving more essential now than it has ever been - with rising inflation, a looming interest rate rise and more job losses, it's no surprise that people are concerned and comforted by having cash to hand and accessible.

'Hopefully this is not just a blip we are seeing in savings fuelled by recent redundancy payments and low consumer confidence.'

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