Debt problems – pay off debt
07/03/2011People with debt problems currently considering the best ways to deal with them, might be interested to hear the comments made by a money advice website this week.
Lovemoney.com is urged people to pay down their debt rather than increase their savings pots in 2011.
Ed Bowsher, head of consumer finance for the website says people with debt problems should address their money issues instead of trying to put money away.
He says: "If you have a serious debt problem, I'd firmly advise you to pay down your debt rather than save."
He explains that consumers will get a poor return on their savings at the moment anyway, so it makes more sense for to pay down debt wherever possible.
When interest rates rise, people with debt problems will then be paying less interest, due to their debt being smaller.
The comments come in reaction to new research by moneysupermarket.com published earlier this week.
The study finds that five million Brits are permanently in the red, with one in ten needing their overdraft to survive.
Debt solutions expert, Kevin Still says, "As a Debt Management Company, the people we assist do not have a surplus of income to save every month.
Loss of income or major reductions in disposable income are very common reasons for seeking debt advice and potentially starting a debt solution like a Debt Management Plan (DMP) or an Individual Voluntary Arrangement (IVA)." 
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