Spare cash redirected to pay off debts

Over a quarter of people in the UK see paying off debt as their number one financial priority.

Research by Fairinvestment.co.uk found that 26% of Brits are making debt repayment the primary objective for any money they have left over at the end of the month.

Sharon Bratley, Fairinvestment.co.uk’s chartered financial planner, said that paying off debts is sensible in the current climate of low interest rates and high potential of unemployment.

She added that whilst it’s important for Britain to relearn the culture of saving, “it is also wise for people to pay off any debts they have first, and then save any extra cash.”

Interest rates on loans are higher than the rates on savings accounts, Bratley said, so the money saved by paying off loans is greater than the interest that would be earned putting the same money into a savings account.

For those who have paid off their debt, Bratley recommends looking for accounts with an interest rate of 3% or more, such as the Birmingham Midshires Cash ISA and the Halifax International Regular Saver.

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