Savings ‘being wasted’ as debts mount up

Many thousands of consumers around the UK are effectively wasting their own savings cash by leaving their debts unpaid, new research has suggested.

Figures compiled by Mintel on behalf of Moneysupermarket.com show that the majority of adults around the country who contribute to a savings vehicle also repay interest on their debts.

With this in mind, the financial comparison firm is keen to see British consumers improve their debt management procedures and at least ensure that their savings account pays more in interest than their debts cost to service.

Kevin Mountford, head of savings at Moneysupermarket.com, said: “Savers should always consider their whole financial scenario before putting too much money away, especially if they have debt they are paying interest on.

“Certainly, with loans hovering around 7.9 per cent and credit cards at 15.9 per cent, it’s absolutely essential you have your savings in an account paying at least six per cent.”

Excluding mortgage arrears, the typical British household has more than £8,000 worth of debts outstanding, according to data from the Credit Action charity.