Loan move ‘could help personal budget’

Many people are focused on the upcoming Budget speech by chancellor of the exchequer George Osborne, with much attention likely to be focused on how tax and spending decisions will affect their lives.

But while the cost of petrol, alcohol, cigarettes and a range of other tax and benefit measures may be of great interest and have a substantial impact, people have been advised to remember they are not just passive bystanders when it comes to their finances.

Price comparison website uSwitch noted those wanting to juggle their own budgets to improve their finances can do so in a number of ways, including those that may help to clear debt or at least reduce it.

A key example given was the possibilities provided by personal loans. The site noted these have become increasingly competitive in recent months, not least for deals over £7,500 and in this case, the average borrower could save £105 a year by consolidating an existing loan with a cheaper one from elsewhere.

Head of banking at the site Kevin Mountford commented: “Rather than letting rising costs diminish their own spending and saving power, consumers need to take control of their finances and be their own ‘Chancellor’ by reviewing their own household budget.”

The importance of such moves may be emphasised by the fact that the most obvious way people could seek greater financial well-being – a large pay rise – is unlikely to be viable at present.

Incomes Data Services recently revealed the average settlement in the three months to January was for an average 2.8 per cent increase, but this represents a pay cut in real terms, with Consumer Prices Index inflation at four per cent.

By Joe White