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Saving outstrips borrowing for first time in two decades

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More people are setting money aside than those who are borrowing to spend, new figures have revealed.

According to the Bank of England, UK households deposited £24 billion in savings accounts last year but only took out £20 billion in loans.

This the first time that thrift has outpaced spending since 1988, when records began.

The recession has had the effect of encouraging households to save and to pay down debts rather than spend amid concerns over possible hikes in interest rates and the threat of unemployment.

The lack of available credit may also have been a factor in dampening the borrowing figures.

The ascendance of saving has come despite the fact that most savings accounts are offering low interest rates.