The closed high streets and limited spending options of the Covid-19 lockdown meant Brits were able to pay off £1.2bn in credit card debts and overdrafts last month.
Bank of England data out today showed net repayments on products such as credit cards, personal loans and overdrafts was at the strongest annual rate in 27 years.
UK consumers repaid debt more than they borrowed, consumer credit borrowing fell by 9.9 per cent annually – marking a new low since records started in 1994, the BoE data found.
During February, Brits paid off £1.2bn of consumer debt. However, the Bank said the figure was slightly smaller than the average of £1.8bn monthly net repayments made since March 2020.
The reduced disposable income spending is leading to a glut of personal savings too, which some economists at Goldman Sachs have predicted will lead to a £16bn spending boom once lockdown is fully lifted in the summer.
February also saw UK savings accounts swell by £15.8bn but economists at Pantheon Macronomics are less sure that a wave of spending will be released at the same time Brits are from their houses.
“We continue to think that relatively little of this extra cash will be spent in a way that will boost GDP over the next year. Households likely will reserve some of this cash for imported goods and services—especially new cars and foreign holidays—while others will keep as a precautionary buffer or top up their underperforming pensions”.