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On Thursday the Bank of England is meeting to decide what to do with interest rates, and the smart money is that they'll go up.

But while that's good news for savers, for millions of homeowners it means more money going out of their accounts each month to pay for their mortgage.

And renters won't escape either - with landlords seeing their mortgage costs rise too, and potentially passing that cost on to tenants.

Worse, figures from Which? show that one person in 20 on a variable rate mortgage could struggle to make ends meet if interest rates rose by 0.25% as anticipated.

Rate rise fallout

(Image: EPA)

It's been more than 10 years since Bank of England interest rates last rose - with calculations showing a staggering 8 millions Brits haven't seen interest rates rise in their adult lives, Hargreaves Lansdown calculates, while millions more will have barely been affected by the last one.

That means while pensioners clamour for better rates of interest on their savings, millions of working families might be in for a rude awakening.

Which? found that 42% of all those with existing mortgages have been homeowners for 10 year or less. This means that just under half of mortgage holders have never experienced such a rise, raising vital questions around levels of awareness and preparation.

And Which? figures show a quarter of mortgage holders had variable rates, a third of those said there would be an impact on their day-to-day living if the interest rate rose by the expected 0.25%. While alarmingly, one in 20 of these said such a rise would leave them struggling financially.

What you can do about it now

Which? is calling for all banks, lenders and other critical firms, such as utility companies, to make sure that their customers – especially the most vulnerable - have the advice and support they need to cope with a hike in their repayments.

But that doesn't mean you should just wait to be contacted.

Mortgage holders are advised to look at how a rate rise would affect them now, and think about speaking to an adviser on whether remortgaging to a fixed-rate deal, for example, might better suit you.

“With one in 20 of variable rate mortgage holders saying they would struggle to make ends meet, it’s important that preparation to deal with the impact of a hike starts now," said Which? Money editor Harry Rose.

“Planning ahead with an effective budget is one simple way to stay on top of your finances. But we’d also like to see banks, lenders and utility companies reaching out to those deemed most vulnerable. For those concerned - speak to your bank and seek urgent advice. Plan now to avoid being caught out.”