Britons - Those With Financial Concerns 'Should Take Action Now'

An increasing number of Britons are worried about their capacity to manage their money, new research shows.

In the Debt Index study carried out by MoneyExpert, it was revealed that 3.04 million consumers are currently extremely worried regarding their ability to control their finances. Overall, some one in three (33 per cent) adults who are in some form of personal debt are either "concerned" or "very concerned" about how they will manage with making repayments. The firm indicated that such debts may include UK personal loans, credit cards and mortgages, with the increase in money management concerns largely being attributed to the impact of spending over the festive period.

Findings from MoneyExpert also showed that cheap personal loans are becoming increasingly popular among Britons. During the last three months the proportion of consumers with such a loan has gone up by one percentage point to 28 per cent. Uptake of overdrafts was also indicated as rising.

Research from the firm additionally showed that 27 per cent of those with debts have gone on to increase the amount by which they are in the red during the last three months. Meanwhile, 2.03 million have seen their indebtedness rise by at least by 20 per cent during this period of time.

On the other hand, the number of Britons who are not worried about their debts was indicated as staying stable. Currently some 12.7 million consumers do not have concerns about their capacity to make repayments on loans, mortgages and other borrowing constraints, about the same number recorded three months ago. Meanwhile, just over a quarter (26 per cent) of people have reduced their levels of indebtedness.

Sean Gardner, chief executive of the firm, said: "The fact that one in three people who owe money are concerned or very concerned about their ability to manage their debts is worrying. The interest rate cuts in December 2007 and this month will help but it remains the case that borrowers have to take action themselves. The Christmas spending spree has undoubtedly had an effect and many who have increased their borrowing will probably clear their debts in the next few months. Anyone who is worried that they are struggling to keep on top of their debts is heading for serious trouble if they do not take action now."

The chief executive went on to claim that it is important consumers face any financial difficulties head on. He pointed out that transferring debts to more cost-effective products or taking out a UK consolidation loan were just two ways in which people can get to grips with money management concerns.

Indeed taking out a loan for the purposes of debt consolidation could be an effective way for many Britons to sort out their finances. By applying for a debt consolidation loan, borrowers may be able to merge numerous demands on their spending into a single low-cost repayment. This type of loan may be of particular help for those who have kept money difficulties concealed but are now looking to be open about such problems. Earlier this month, a spokesperson from the Consumer Credit Counselling Service stated that by being honest about difficulties with debt could be the first step for people to get into a more manageable financial position.