Households `are looking to debt management`

Debt management is becoming more of a priority for households due to the low interest rates available on savings, it has been suggested.

Brian Morris, head of savings policy at the Building Societies Association (BSA), claims that there is already evidence of debt management efforts subtracting from the UK`s communal savings pot.

With this in mind, he forecasts that the total amount held in savings by British citizens could drop over the course of 2009, once interest payments into accounts are discounted.

"In the current low interest rate environment there is evidence that households are looking to repay debt rather than save," he comments.

Figures from the BSA show that, in April alone, £811 million was withdrawn from building society savings accounts.

The trend could be set to continue, in light of a recent survey conducted by the BSA.

It found that the majority of chief executive officers of building societies believe the base rate of interest will remain at its current level of 0.5 per cent until the end of 2009.