The next highest priority was increasing savings (43 per cent) followed by earning more money (40 per cent).

61 per cent of those looking to reduce dept said they would start budgeting in 2005 and try to spend less, while 30 per cent hoped to earn more or look for a second job to reduce debts.

One in ten said they would consider a debt consolidation loan as a solution to reducing their debts in the New Year.

“People are beginning to see that by budgeting better, personal debt can be reduced considerably.

“This doesn’t just mean spending less, but also paying less interest on your debts,” head of personal loans at Alliance & Leicester, Andy Bayes, said.

To find out more about debt consolidation loans, click here.
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