Use savings accounts to create a buffer, urges Worldwide Financial Planning

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Use savings accounts to create a buffer, urges Worldwide Financial Planning

Thu 2nd Dec 2010

Worldwide Financial Planning has encouraged consumers to put aside up to four months of expenditure in case 2011 sees interest rates begin to rise again.

Peter McGahan, a representative from the organisation, told unbiased.co.uk that too much inflation in the economy could see interest rates go "northwards".

If this is the case, people should aim to have several months expenditure put aside instead of pay off as much of their debts as they can, he suggested.

"Cash flow is important. If you have any loans that are on a variable rate be careful to pay off the highest interest rate loans first," said Mr McGahan.

In his opinion, a bank loan reduced by a certain amount of money is not as useful as the equivalent sum in cash.

This week, money.co.uk managing director Chris Morling suggested people can save cash on their credit card bills as long as they are clear about which type of account suits their spending habits.

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