Survey: Brits 'more committed to spending than saving'


People in the UK are twice as committed to spending on their credit cards as they are to saving, new research suggests. A survey by Standard Life found that the average person spends £3,804 on credit card payments each year, while a typical saver puts away just £1,680.


The findings highlight the importance of using the most suitable credit card to help manage outstanding debts, say experts.

Credit card payments exceed savings deposits
The average person with credit cards spends £317 on card payments each month, according to the latest study by Standard Life, which asked research firm YouGov to survey 2,016 adults earlier this year. Meanwhile, the average saver puts just £140 into their savings account each month.

The survey also revealed that people who make monthly credit card repayments typically spend nearly nine minutes per day thinking about these payments, whereas savers think about their nest eggs for less than 3.5 minutes per day, on average.

Card debts 'need to be managed well'
John Lawson, a spokesman for Standard Life, said that people with credit card debts need to manage their money well in order to prevent debts from mounting up. However, observed Mr Lawson: "Some people may be using their credit cards really effectively, paying them off each month and not splashing out on nights out or designer items that they really can't afford."

Mr Lawson also stressed the importance of savings, as a healthy savings account can help to prevent people from falling into debt in the first place. However, he emphasised: "Obviously paying off any credit card debt you have should always take precedence over savings."

Consumers should shop around for most suitable card
Britons' apparent fondness for credit cards also highlights the importance of using the most appropriate card. For instance, those who manage to pay off their bill in full each month may want to consider taking out a rewards card, such as one that provides cashback or loyalty points, that they can use to save on other purchases.

People who are considering making a large purchase that they plan to repay in instalments may be better off using a 0% purchase card, as this will give them several months interest-free.

Finally, consumers with existing credit card debts should try to move their outstanding balance on to a credit card that offers 0% on balance transfers for several months. This will give them extra time to pay off their debt without accruing interest.

See related: Over-55s struggle with rising unsecured debts; Study: Worst consequences of recession 'still to come'

Published: 5 October 2011