Brits paid off a record £7.4bn ($9.3bn) of debt in April during the coronavirus lockdown, according to the latest Bank of England figures on household debt, released on Tuesday.
UK households paid off £5bn in credit card debt alone in April, more than double the record £2.4bn paid off in March.
In comparison, the average repayment of consumer credit each month comes to £300m, suggesting that people are using lockdown to “reduce their spending, shore up their savings and slash their debt,” according to investment platform AJ Bell.
However, Brits still owe £64bn on unpaid credit cards.
People have also saved more during lockdown, with households saving £16.2bn in April — more than triple the usual £5bn a month that was saved over the previous six months.
Some 70% of people have saved money in lockdown, as they have cut the cost of their commute by working from home, slashed their spend on going out, and have reduced the cost of their bills, according to a survey of 2,002 UK adults by Opinium and AJ Bell.
“The lockdown has created a divide in the country, with some households seeing cuts to income, job losses or being furloughed, while others are seeing their finances benefit from an enforced halt to much of their spending,” said Laura Suter, personal finance analyst at AJ Bell.
The Bank of England figures also showed Mortgage lending plunging to a record low during lockdown, as the housing market stalled and a number of lenders restricted their offerings.
Just 15,848 mortgages were approved for house purchases in the month, around 80% lower than the level seen in February, before the pandemic swept the country, the bank said.
The number of approvals in April — the lowest since the bank started collecting this data in 1993 — was around 50% lower than in the weakest month for mortgage lending during the financial crisis.