Responding to new figures from the Bank of England showing that the most common types of savings accounts now offer the lowest rates on record, debt management company Gregory Pennington has advised consumers that savings should still be a very important aspect of most people's finances, and added that they should not be discouraged by low interest rates.

In February, the Bank of England made the unprecedented decision of cutting its base rate to 1% - the lowest in its 315-year history. It was a further attempt to encourage lenders to offer loans and mortgages at lower rates, as well as an incentive for consumers to spend rather than save, which would increase cash flow within the economy.

However, the decision to cut the base rate was met with some criticism from a number of analysts, who claimed that base rate cuts are no longer an effective means of combating the economic downturn. They argued that base rate cuts would only serve to disadvantage savers, since the interest rates on offer are now significantly lower than the rate of inflation - meaning that savers are 'losing' money in real terms.

Take the following example: if a saver puts Pounds Sterling 5000 into a savings account with a 1.5% interest rate, they will make an additional Pounds Sterling 75 interest in a year. In the meantime, a 3.1% inflation rate would mean that the average price of goods would rise at more than double that rate - so in terms of purchasing power, the savings would be worth less after a year.

A spokesperson for Gregory Pennington said that although there has been some concern raised about low interest rates, it should not prevent people from making savings.

"The way the fall in interest rates has been reported almost seems to suggest that it is no longer worth making savings, but that is not the case," she said. "A large proportion of people who put money aside are not doing so to make more money - they are doing it because they want to save their money for a later date. In this sense, savings would even be worthwhile if the interest rate was 0%.

"Even when interest rates are high, it would take a very large amount of money to make the interest a significant incentive. We advise consumers that savings should be an integral part of most people's finances, since they provide a financial 'safety net' that can be a lifeline if any financial emergencies arise.

"The only situation in which savings should not be a high priority is if the consumer is struggling to repay debts. Debt repayments should always be top priority, since debts often grow a lot more quickly than savings do. The long-term consequences of not repaying debt also tend to outweigh the benefits of saving."

The spokesperson added that anyone in trouble with their debts should speak to their lenders, as well as a professional debt adviser, in order to discuss their options.

"In many cases, lenders will agree alternative repayment plans, or brief repayment holidays, to let the borrower get their finances back on track," she said. "If that doesn't solve the problem, then it may be time to speak to an expert debt adviser for a more specific debt solution.

"There are a number of ways borrowers can manage their debts, such as a debt management plan, debt consolidation loan or an IVA (Individual Voluntary Arrangement). Getting debt help from an expert adviser can help borrowers to establish the best debt solution for their needs."