Shane Craig, spokesperson for Paymentcare, said that with thousands of jobs predicted to go this year as businesses tighten their belts in response to the credit crunch, any savings made from reduced mortgage repayments will be irrelevant to those who find themselves out of work.

According to Paymentcare, for those who have no other way of meeting their mortgage repayments if they lose their income, the sensible response to the recent rate cut would be to use the saving to pay for some form of mortgage protection.

“With the cost of everyday necessities having soared – petrol, food, gas and electricity and the pound’s weakness against the euro forcing up the cost of a European summer holiday – it would be foolhardy to interpret the latest rate cut as an excuse to relax, even a little bit,” Craig said.