With interest rates as they are, saving seems a little pointless.
We have all of our debt on a 0% credit card, so is isn't earning any interest, but obviously is still hanging over our heads (we are paying it off at a reasonable rate, it's not remotely crippling, just annoying).
We have about 2 month's income in an ISA in case of emergency, which made sense to keep rather than using it to pay off the debts when it was earning a reasonable interest, but as the interest falls it seems less and less useful.
So, would you keep the savings, pay off the debt (the savings will pay off about 2/3 of the debt), use 1 month's income worth of savings to pay off the debt, or leave everything exactly as it is?
DP has a good job, although in current climate, who knows how secure anything is, and I am on maternity leave, but could go back if anything happened to DP's job. Will probably be going back part time (if they'll let me) in September. My job is about as secure as anyone's, so not toooooo worried about that (but again, who knows in current financial situation!)
If it's only 2 months savings, I'd keep it, since you're not paying anything on the debt - as others have said in case of car problem/boiler carnage etc etc. Although I can really understand your desire to pay off all your debt! Maybe just pay off some (a hundred or so?) to make you feel better. Or, if you've got a mortgage and your rate is coming down, use the excess money and pay it st into the cc?
Have decided to keep the savings, and use my extra bit of pay I'll get this month (minor cock up on my maternity pay, so get a couple of hundred quid extra this month) to put towards the debt to make myself feel better. We are actually paying it off reasonably quickly (considering the amount of time it took to accumulate with DP and my lavish student lifestyles!), I just get impatient and want it cleared...