Consumers 'may be paying down debts' due to base rate

Paying down debt may be a more attractive option than saving for people at the present time, according to one expert.

The Building Societies Association's (BSA) director general Adrian Coles has noted the impact that the current base interest rate may be having on people's desire to save money.

He commented: "There is little incentive for people to increase savings while the bank rate remains at its current low level, and many may prefer to use their money to pay down debts."

The remarks made by Mr Coles follow the publication of BSA figures relating to the amount of money saved by people in November of last year.

According to the organisation, the four-week period saw a £0.6 billion decrease in the overall balance of building society saving accounts.

Meanwhile, Lovemoney.com's head of consumer finance Ed Bowsher has welcomed the fact that some consumers appear to be paying down their debts.

Written by Gemma Walker.