Consumers advised to manage their debt

As one of their New Year`s resolutions, consumers have been advised to manage their debts.

According to David Black, principal consultant for banking at Defaqto, doing so should be part of any plan to put finances in order.

He suggested that consumers overpay their monthly credit card and mortgage payments as interest rates fall, although in the case of home loans people should ensure that doing so does not incur any early repayment penalties.

Mr Black added: "With lower interest rates your monthly payments may reduce, but by overpaying the minimum amount required each month you will begin to reduce your debt more quickly."

Meanwhile, Defaqto also recommended that consumers do not cancel their insurance policies as a short-term means of saving money.

In addition, the organisation suggested that people ensure they are planning for their retirement.

Indeed, Friends Provident recently claimed that 75 per cent of people polled believed the state pension alone is not sufficient to live on.