Better debt management could save Brits up to £20 billion, according to price comparison site uSwitch.com.

With total personal debt across the nation at £1.45 trillion, borrowers in the UK pay out £98 billion in interest every year.

New research by uSwitch found that debt consolidation would save the UK £20 billion in interest payments, with the average household saving over £800 within five years.

For many borrowers, managing debt well could be the difference between bankruptcy and survival in the difficult times ahead.

Louise Bond, personal finance manager at uSwitch, said the year ahead could be one of the ‘toughest in history’.

“It is vital that borrowers give themselves the best possible chance of servicing their debt in the most economical and manageable way possible,” Bond said.

“If consumers are careful about managing their spending, a debt consolidation loan can help to reduce monthly repayments, and it can also help to settle borrowings earlier as the repayments are fixed and set for an agreed number of years.”

Other options available, especially if you have been refused further credit and therefore cannot consolidate your debts with a debt consolidation loan could be a debt management plan or an IVA (individual voluntary arrangement).

Personal debt in the UK increases by £1 million every ten seconds, according to debt charity Credit Action.

Posted 09/05/2009 11:48:38