Reluctant savers should pay off debts now
Chartered financial planner for Informed Choice, Martin Bamford, feels that the low interest rate and high levels of inflation may be what is discouraging some consumers from saving. However, if savers are unwilling to save, they should take the opportunity to pay off debts on their mortgages and credit cards.
Individuals should be trying to improve their financial predicament overall, he said. “Paying off debts while the best interest rates are not available on savings “usually makes good financial sense”, Mr Bamford stated.
The Consumer Price Index annual figure for inflation was up to 3.5 per cent in January, from 2.9 per cent in December.
According to Mr Bamford, this high level “is a bit of a cruel trick for the UK economy to play on savers, after interest rates have been at such a low level”.