People 'better off settling debts than saving'

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People 'better off settling debts than saving'

Tue 20th Apr 2010

A finance expert from Bestinvest has suggested that consumers are right to use this time of low interest rates to pay off debts, since savings accounts are not paying out much at the moment.

Adrian Lowcock, senior investment advisor at the organisation, made his comments regarding research published by Sainsbury's Finance, which showed that less people are taking out loans for debt consolidation than two years ago.

He suggested that the situation is indicative of the wider market, with interest rates on mortgages and personal loans going up and savings accounts not offering a particularly profitable return.

Mr Lowcock explained: "People had to consolidate their debts at various rates over the last couple of years. In some instances the loans are just not available so people have had to pay down their debt."

In his view, in many cases it is down to people being realistic about the state of their finances.

Sainsbury's Finance stated that one pound in every 13 borrowed by personal loans customers was used for debt consolidation in 2007, but this has dropped to one in every 50 in 2009.

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