Cutbacks to be helped by debt consolidation measures?

Britons are still looking to reduce their monthly outgoings, a new survey has revealed.

The poll by insurance firm Allianz revealed 70 per cent plan reductions in their spending in 2011, with 12 per cent saying they will make large cuts.

Such measures may be helped by debt consolidation moves, as this will mean less is being spent paying back money owed on credit cards and loans.

The poll showed the most popular reduction is on entertainment, with 74 per cent planning to trim their budget in this area, while 51 per cent intend to switch utility bill providers.

Other popular actions include spending less on food, on TV/internet and travel.

Head of home and motor portfolio management for the firm Gareth McChesney warned some consumers could trim budgets in the wrong ways, such as by spending less on insurance.

“People will naturally prioritise what is important to them but there is a danger that by cutting in the wrong places Brits could be left even more at risk,” he remarked.

Reducing debt to free up cash could enable people to carry on ensuring themselves adequately.

The importance of debt consolidation was also noted recently by director at MyMortgageDirect Catherine Hearnden, who said it should be the first response for those who find it hard paying rent or mortgage costs.

Responding to recent research by Shelter revealing over two million people used credit cards to cover such costs last year, she said people should work out such plans with lenders as soon as possible, rather than ignoring the problem.

By Amy White