Interest rates are up again – practical measures for households

Kevin Brown saving specialist at Scottish Friendly comments:

With little surprise, the Bank of England has hiked interest rates again. It’s the biggest rise for 33 years, which means there are a few essential implications for households to be aware of.

Rising interest rates will likely have a swift impact on debts – in particular any debt that isn’t on a fixed rate. This includes things like credit cards and some (but not all) loans. Anyone with this kind of debt should look to find a way to fix their interest payments as quickly as possible to avoid higher payments biting.

Better yet, paying down as much debt as possible wherever possible could be a good habit to get into. Beyond paying off debts, trying to put money away for a rainy day is a good way to build a buffer, especially with so many unexpected bills likely in the current climate.

Ultimately though, even the best rates are still way behind high levels of inflation. For long-term wealth, investing could still be a feasible route to growth.