PPI holders 'prioritising debt'
05 March 2010
Payment protection insurance (PPI) holders struggling with debt may benefit from the decision made by the Bank of England''s Monetary Policy Committee to leave the base rate at 0.5 per cent, according to a banking specialist.
David Black commented that people''s priority while the rates remain low is likely to be paying off debts rather than setting savings aside.
The debts generating the most amount of interest are the ones that should be paid off first, he emphasised, noting that unsecured loans, overdrafts and credit cards should be the main areas of focus.
However, he commented that those who are saving money, rather than paying off loans, are likely to be hit harder by the interest rate decision.
PPI holders struggling with debts are not alone - recent statistics from Credit Action indicate that the average household debt, including mortgages, in the UK last month reached £58,040.
The figures also indicated that payments on personal loans are currently estimated to be a collective £68.3 billion - an average of £2,710 a year per household.
