New research from Alliance & Leicester today reveals that despite 41% of adults in Great Britain having debts on credit cards, store cards, overdrafts and loans, more than a third (36%) of these people have no plans to review their finances this New Year.

Many consumers could make significant savings by shopping around for better deals on offer and consolidating their debts on to a low-cost personal loan.

Conducted by independent research agency BMRB, the survey shows that less than a quarter (22%) of indebted consumers are planning to consolidate their debt. The majority of these (75%) recognise the benefits that consolidation brings, including saving money and reducing their monthly repayments.

For example, a consumer with total debts of £5,000 could consolidate them onto a low rate personal loan such as Alliance & Leicester's typical rate of 6.9% over three years, which could save over £960 in interest payments.

This example is based on having £800 on a Debenhams store card with an APR of 28%, £3,000 on a Natwest credit card with an APR of 17.4% and £1,200 on a Marks & Spencer credit card with an APR of 18.9%.

Commenting on the findings, Andy Bayes, Head of Personal Loans, Alliance & Leicester, said:

“It is a concern that so many people with debts on expensive credit cards, store cards and overdrafts are not thinking about ways to reduce their debt and save money.”

“There are real savings to be made by shopping around, so consolidating your debts to a better deal is one New Year's resolution well worth making.”

By providing just one monthly repayment, debt consolidation to a personal loan can help consumers keep track of their finances more easily. Of those polled who are considering consolidation, 40% said they find it hard to manage lots of separate repayments, thus, consolidation would help ease this problem.

Take care after consolidating

However, for those who do consolidate their debts it is imperative that they use credit or store cards more responsibly. Nearly three-quarters (73%) of people who are planning to consolidate their debts say they may continue to use credit cards, store cards and overdrafts in the New Year.

Andy Bayes concluded: “Consolidating your debts into one personal loan will not only save you money but will make life easier by giving you just one monthly repayment.”

“However, having done so, consumers need to continue to use their credit and store cards responsibly. Without this discipline it is all too easy to fall into further debt.”

Alliance & Leicester has produced a free independent online guide to reviewing finances in the New Year, helping consumers understand how they can save money by consolidating their debts. For a free copy of the guide, visit www.alliance-leicester.co.uk/factsheet