People may want to try and stay debt free

Individuals who are trying to stay debt free need to make sure they monitor their payments closely after one expert revealed people have been allowed to reach unsustainable levels of debt.

Jo Parsley, advocacy and media officer for Credit Action, noted consumers should be trying to live within their means. Those who do follow this measure will benefit in the long term, she added. “A nation of out of control borrowers is not good for UK consumers or the economy. Whether consumers are in debt or not, they still need to spend, but the key is to do so within their means,” the specialist continued.

With concerns remaining about jobs and interest rates at an all-time low, now may be a good time for people to use debt consolidation methods to reduce their monthly outlay and get their finances in order. One possible solution could be to use an individual voluntary arrangement (IVA).

Consumers who decide this method is best for them will need to still be in full-time employment and owe over £15,000 to three or more creditors. The scheme will afford people the opportunity to merge unsecured lending into more manageable monthly repayments.

Ms Parsley observed figures released by unbiased.co.uk highlight Britons are staring to see the need to tackle the issue of arrears. Figures from the organisation found savings levels have dropped as financially-stricken people try to clear the amount they owe. They are paying seven pence of debt for every pound they saved in the second quarter of 2010. This resulted in savings levels falling by over £7 billion in the second three-month period of the year, when compared to the previous quarter.

Tony Dolphin, senior economist at the Institute for Public Policy Research, recently noted it will take six or seven years to get Britain’s deficit under control.

Posted by Joe White