A third of Brits are planning a complete financial makeover because of the global credit crunch, it has been reported.

According to Friends Provident, 75 per cent of these people think an overhaul of their financial products will save them money and 23 per cent think they will save over £500.

For 41 per cent of consumers, making a budget is the most important aspect of economising, 14 per cent plan to cut back on socialising and hobbies to save money and 13 per cent intend to cut up their credit cards.

James Ward, director of marketing at the firm, commented that the credit crunch seems to be making consumers more aware of their finances.

"The trick is to harness this heightened awareness and to do something positive, like overhauling your finances, budgeting effectively and investing your money in a way that makes it work smarter for your needs," he said.

This month, the Bank of England's monetary policy committee reduced the base rate by a quarter-point to 5.25 per cent.

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