Brits 'should focus on reducing borrowings'

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Brits 'should focus on reducing borrowings'

Wed 1st Feb 2012

Individuals who presently have significant levels of debt should focus on reducing their borrowings before interest rates rise from their present record-low position, it has been argued.

Mark Bower, managing director at moneymaxim.co.uk, said all households should retain a reasonable buffer of spare cash, but it is also highly recommended that individuals focus on paying off their borrowings before the rates increase.

He commented: "We are recommending they consider reducing their current borrowing levels ahead of any interest rate increase, particularly as the interest that is earned on savings is as low as it is at present."

According to Paula John, editor-in-chief at Your Mortgage, Brits should be looking to pay down their debts rather than putting money aside for a rainy day.

However, she noted that the majority of people are continuing to put excess cash into savings accounts, despite the fact they are receiving very little return in the present market.

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