Report points to ‘interest rate ignorance’

A report from the CreditExpert company has pointed to a lack of awareness among UK credit consumers of how they are impacted by changes to the base rate of interest.

Many people face heightened debt management difficulties after rises in interest rates, but the majority of British adults do not accurately understand how their impact is felt, the financial services firm suggests.

Moreover, there is widespread ignorance among the British population about how exactly their finances are likely to be squeezed if annual percentage rates on their borrowings are increased, the company reports.

“The lack of understanding of key terms and the effect of interest rate changes is worrying,” said Jim Hodgkins, Managing Director of CreditExpert.

“It’s important for people to be familiar with standard financial terms and stay on top of changes that affect their personal finances so they can make the best possible decisions and choices,” he added.

The Bank of England has opted to increase the base rate of interest five times since August of last year.