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Interest rate rise should act as catalyst for saving

The decision by the Monetary Policy Commitee to increase interest rates by a quarter per cent should act as a wake up call for the UK consumer so start saving and consult their adviser, says IFA Promotions.

New research from IFAP shows 72 per cent of UK consumers believe they aren’t saving enough, but out of the people who are in a position to increase the amount they currently save, almost 8 million (18 per cent) claim they enjoy spending their money too much to do so.

Following the recent decision to raise interest rates IFAP is urging consumers to take heed of the potential benefits of an interest rate rise and to start saving their money.

IFAP chief executive David Elms says: “Last week’s announcement should be treated less as blanket bad news for the heavily indebted UK consumer and more as a wake up call to save more and spend less. The interest rate rise is minimal, but has met a shock reaction, which I hope will trigger people to finally take their heads out of the sand and act logically when it comes to their future financial security. At the very least, it should deter people from unnecessary spending and the temptation of taking on new debt, but what we really need is a long-term commitment to saving. With the prospect of increased rates of returns, now is an ideal time to start.”

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