Spare cash ‘should go towards paying debt’

People are being advised to put any spare money into paying off debt.

Kevin Mountford, head of savings at moneysupermarket.com, believes putting extra cash into reducing the amount that is owed is the “rational and sensible thing to do”.

He said: “It pays to pay off debt, or – if your mortgage allows it – offset your mortgage.”

This is because savings accounts are offering a poor return due to low interest rates.

The comments come after research from unbiased.co.uk indicated debt levels are now lower than at the end of 2009.

Brits are currently borrowing just over £6 billion, compared to the £14 billion last year.

However, Mr Mountford did advise for some savings to be stored away in case of a loss of job or an inability to work, as it would allow people to be more comfortable with their finances for at least a few months.

The debt in the UK has affected males the most, according to the Consumer Credit Counselling Service, as the amount of men seeking advice from the charity has risen by over 50 per cent since 2007.

By James Perkins