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VAT reduction 'should be used to pay secured loans

VAT reduction 'should be used to pay secured loans

Category: Loans

Updated: 26/11/2008
First Published: 25/11/2008

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Consumers have been advised to consider using the help given by the pre-Budget report to pay off debt.

Yesterday the chancellor, Alistair Darling, announced that value added tax (VAT) would be reduced from 17.5 per cent to 15 per cent from the beginning of next month. notes that this will allow for the strain on household finances to be gradually relaxed.

But rather than spend the money, the financial website suggests that it be used be reduce amounts owed through unsecured and secured loans.

Head of personal finance David Kuo remarks: "Unlike the government, consumers do not have a limitless credit card to fall back on. Saving, investing and paying down debt are our best ways to survive the downturn."

Earlier this month Mr Kuo noted that credit cards and store cards are set to become increasingly difficult to obtain this Christmas, while interest rates are likely to be high.

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