Debts being paid off, expert says

Britons are focusing on settling their debts because saving rates are not particularly high at the moment.

This is according to Ed Bowsher, head of consumer finance at lovemoney.com, who said that people believe such action will mean that they will be better placed financially when rates do increase again.

He went on to say that paying down debt is particularly important for those with high interest on the amount owed and people should make an attempt to get their arrears on the lowest rates possible.

However, Mr Bowsher did observe that it could be a mistake to concentrate entirely on debt.

“We live in difficult times and there is still a risk that you might lose your job and have some other calamity,” he remarked.

His comments come in response to figures recently published by Credit Action, which revealed that at the end of November 2009, total UK personal debt stood at £1,459 billion, with lending climbing by £1.1 billion.