Britons should focus on debt rather than saving

Consumers should prioritise paying off debts at present, it has been said.

Britons should be more concerned with paying off debts they have accrued on finance options such as credit cards and personal loans than storing cash in savings accounts at present.

That is the opinion of Justin Modray of online resource Candid Money, who believes that the economic climate in the wake of the global downturn makes it more sensible for individuals to concentrate on getting themselves back on an even keel financially.

Throughout the recession, many people have been forced to rely on borrowed funds to survive due to the effects of factors such as rising inflation, redundancies and wage cuts or freezes.

And Mr Modray explained that anyone in such a position should make their primary focus removing the burden of debt on their household as quickly as possible, rather than looking to build for the future.

He added this could be particularly true for consumers who have built themselves a monetary safety net in the past and are therefore in a secure position.

"Those fortunate enough to have savings can use them to stave off debt, but I think for many it's more a case of just trying not to drown in debt and saving for the future remains a pipedream," the expert noted.

Yesterday (August 1st), Credit Action published its debt statistics for this month, which revealed that the average arrears being experienced by UK households is £55,803, while every adult across the country owes a total of £29,536 including their mortgage repayments.

Mr Modray went on to suggest these figures could rise even further in the near future as the cost of essentials like food and fuel look set to remain high.

However, he concluded that the likelihood of interest rates staying at or around 0.5 per cent for the foreseeable future could provide some respite for consumers.

Obtaining a credit card with a zero per cent balance transfer fee could be a good idea for anyone feeling overwhelmed by debt in the wake of the economic downturn, an expert believes.

In the aftermath of the recession, many Britons are likely to find themselves in debt due to their excessive borrowing on plastic or through personal loans and Yvonne Goodwin, managing director of Yvonne Goodwin Wealth Management, has offered advice to such individuals.

Ms Goodwin explained that first and foremost, people need to analyse what areas of their current outgoings are not essential to see where savings can be made.

The expert went on to state that consumers "really struggling" could close their existing credit cards and take out an alternative with zero per cent interest to help pay off the debt.

Recently, David Rodger of the Debt Advice Foundation stated that low income families in particular may have to resort to using plastic in the last few years.