There is no single number that works for every household, but there is a sensible order: protect priority commitments, understand the cost of each debt, keep appropriate emergency access to cash and direct extra money where it has the strongest effect.
Start with priority payments
If you are behind on housing, energy, council tax or another priority commitment, deal with that before optimising savings interest. If payments are already being missed, free debt advice can help you understand the consequences and options.
Why expensive debt often comes first
Borrowing commonly costs more than cash savings earn. Paying down a high-interest credit card can therefore improve your finances faster than adding the same amount to a low-interest savings account. Keep making required payments on every debt while directing extra money according to your plan.
But keep emergencies in mind
Using every available pound to clear debt can leave you forced to borrow again when something breaks. Depending on your circumstances, a small starter buffer can reduce that risk while you attack expensive balances.
Check repayment penalties
Not every debt should be overpaid immediately. Some loans and mortgages can have early-repayment charges. Check the agreement and compare the saving from overpaying with any penalty.
A practical decision order
- Keep priority bills and minimum contractual repayments current.
- If you are missing payments, get free debt help.
- Build enough accessible cash to avoid obvious short-term re-borrowing.
- Compare APRs and charges on your debts.
- Put extra money towards expensive borrowing unless a penalty or other important factor changes the calculation.
- Increase emergency savings as the expensive debt comes under control.
What about investing?
Investing is generally for money you can leave alone for years and whose value can fall. It is not a substitute for emergency cash, and carrying expensive unsecured debt while investing adds risk. Get the basics stable first.
Put the decision into numbers
If you have several debts, try the free Debt Planner to compare repayment approaches using your own figures. To estimate a cash buffer before making optional overpayments, use the Emergency Fund Planner. These tools are starting points, not personalised recommendations; protect priority bills and get free debt advice if you cannot meet essential payments.
Useful sources
MoneyHelper: debt, saving or investing first · MoneyHelper: help with debt