With Alistair Darling set to announce his first Budget as Chancellor of the Exchequer later today, people should be conscious of the impact that the MP’s speech can have on their finances, it has been suggested.

According to Callcredit, people already need to be increasingly aware of the effects that a fall in disposable income and rising debt levels will have on their ability to spend. However, it was suggested that Mr Darling’s report can also have a great influence on consumer expenditure.

“In the current financial climate consumers may feel like they are being squeezed from all sides with growing mortgage repayments and increased taxes on alcohol and motoring,” Mel Mitchley, director of industry relations for the credit reference agency, pointed out.

Following on from higher taxes on the likes of tobacco, alcohol and transport, it is possible that many Britons discover that pressure on their finances increases. This could affect their ability to make repayments on UK personal loans and plastic cards, as well as areas such as utility bills and council tax.

Citing figures from Philip Hammond, shadow Treasury chief secretary, the credit report company pointed out that disposable income of the typical family has dropped by 300 pounds in the last two years. In 2006 this was at 26,200 pounds, however the figure now stands at 25,900 pounds. Meanwhile, it was also stated that levels of personal debt in the country are increasing, with a total of 1,412 billion pounds owed at the end of January.

Ms Mitchley added: “The announcement of the new Budget is the ideal time to tackle your situation head on and make a fresh financial start. Don’t bury your head in the sand. This is the perfect opportunity to take control of your financial situation. Simple steps, such as checking your credit report and knowing exactly how much you owe, can help you manage your money more effectively.”

One of the first things consumers were advised to do was to get a copy of their credit report. Doing so, it was claimed, will allow them to get a “full picture” of their financial standing. Creating a budget and sticking to it was also suggested as a means of getting to grips with spending, with those thinking about taking out another loan or other form of credit first recommended to consider how much money they already owe. Meanwhile, those experiencing difficulties with managing their money were advised to get in touch with their money lenders or with a debt advisory service.

For those looking to get back on their fiscal feet, taking out a consolidation loan could be of assistance. In taking out a cheap UK loan for the purposes of debt consolidation, borrowers may find that they can merge numerous demands on their spending, such as household bills and plastic cards, into one single low-cost repayment. Such a loan may be of help to those struggling with debts on store cards. Speaking earlier this year, James Falla, managing director of Thomas Charles, reported that consumers should avoid this type of borrowing as they are “probably the most expensive form of credit that anyone can consider”.

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