How can you best put your savings to work?

As UK base rates continue to languish at 0.5%, with many experts believing they are unlikely to move higher in the short to medium term, the return on savings accounts at the moment is negligible for many people. So how best can you put your savings to work?

While you need to find a balance between making your savings work and giving yourself something of a buffer in times of trouble, there may be an option for those with debts as well as savings. If you consider the minimal return on your savings, which are effectively losing spending power in real terms because of higher inflation, perhaps you may be better off paying off some of your high interest debt?

If you consider credit card debt for example, which could be attracting an interest rate of over 20%, there may be more mileage in paying off some of your credit card debt thereby reducing the interest charges in the future. In simple terms, by using part of your savings you are effectively increasing the return on your savings to 20%, i.e. the interest charge saved by paying off the capital. However, you do need to find a balance, as we suggested above, between a buffer to help with future problems and making your savings work as hard as possible for you.