Although those struggling with their money management appear to be coping better with the demands on their spending there is no room for complacency, a new study suggests.

In research carried out by Chiltern as part of its regular Debt Monitor, it was revealed that the typical amount of money owed by someone on an informal debt management plan has fallen by about 400 pounds over the course of this year. It was indicated that the average sum consumers are currently in the red by has fallen below the 26,000 pound barrier for the first time during the firm’s period of study. Findings from the financial advisory service also showed that the average debtor is 44 years of age and owes money to eight different creditors. Meanwhile, it was stated that it will take such people 146 months to become free of debt.

However despite the debt monitor showing that the level of money required by people seeking help with finance is at a low, it was warned that many Britons might see their financial burden increasing. Citing research carried out by the Council of Mortgage Lenders, the number of home loans available was indicated as dropping by 30 per cent over the past 12 months. Meanwhile, a number of money lenders were reported to have withdrawn their 100 per cent mortgage deals. And with household expenditure rising, levels of disposable income have been indicated as falling.

Due to continuing rising costs in household bills, transport and food, in addition to a curbing in the availability of credit, it might be possible that consumers find they are coming under even more strain to make repayments on loans, credit cards and other debts.

Nathan Gladwell, spokesperson for Chiltern, said: “The current climate is encouraging more people who are struggling with their finances to seek alternative options, as credit becomes harder to get hold of. Add to that the rises in food, fuel and energy costs and it’s no surprise that most people are feeling the pinch in their pockets.” He went on to point out that those consumers who are struggling to manage their money should “readjust their spending to more realistic levels”.

Meanwhile, those Britons who are stated to be suffering from “debt stress” were advised to seek out assistance. Such consumers were indicated to include people who are using credit to help pay for essentials such as travel and food, in addition to borrowers who have more than four credit commitments. In addition, people who are only able to make the minimum repayments on credit and store cards or are contributing more than a quarter of their income towards making repayments on unsecured debt were urged to get help.

Consumers looking for further assistance in managing their money might wish to consider getting a loan. By using this as a means of debt consolidation, borrowers may find that obtaining a cheap loan could allow them to pay off debts owed to a number of creditors quickly and effectively. A study carried out by Chiltern last year showed that although four million people are officially overstretched when it comes to making repayments on credit cards, loans and other forms of borrowing, two-thirds of these are in denial that they have such problems.

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