Families are beginning to feel the impact of a slowdown in the economy with a new survey finding that parents are cutting back on the amount they spend on their children. Initially, fears of a recession seemed to be confined to the City, but research from Engage Mutual Assurance suggests that children might be the latest victim of 2008's economic woes.

The financial services provider notes that just over half of parents will have to restrict spending on their children in 2008 as living costs increase. Nearly one in two families are struggling to make ends meet and almost a third of those who are living comfortably now expect to have to make cut backs this year. For such consumers, it is possible that a consolidation loan could be an important consideration.

It is not just younger parents who are bearing the brunt of the slowdown, in fact Engage Mutual Assurance finds that it is older mother and fathers that are struggling the most, with parents aged 45 to 54 finding it hardest to give their children what they want or need. Additionally, nearly half of all older parents are having difficulty coping financially.

With many parents highlighting reductions in the amount they spend on their children for toys and clothes it may be advisable for families to take out a personal loan in order to provide their kids with welcome presents come birthday and Christmas. Additionally, with 38 per cent of parents stating that holidays will see a cut back in 2008, a personal loan may be the best bet for those wishing to take a well-earned break this summer.

Rising food and energy costs have been cited as one major cause for a gloomy 2008. Karl Elliot 3GB spokesperson for Engage Mutual Assurance, commented: "With the increased cost of food, fuel and mortgages taking effect, our research shows that many parents anticipate finding it increasingly difficult to make ends meet in the year ahead."

For the 44 per cent of respondents who admitted that they were already finding it hard to make ends meet, nearly three-quarters of these anticipated further cut backs on their kids this year. A cheap consolidation loan may be advisable for those struggling financially as it could allow them to get their financial house in order.

Meanwhile, a new report from price comparison and switching service uSwitch has further highlighted the financial troubles experienced by many Brits, detailing that nearly five million adults spend more they earn and nine million only just break even each month. The research also revealed that almost six million consumers use debt to fund spending but with debt repayments rocketing by 104 per cent this decade, it might be advisable for many Brits to seek a personal debt consolidation loan to get their finances back on track and ensure that spending starts to meet income.

It is not only families that are in a position where they could benefit from a cheap consolidation loan. According to data from the Manchester Business School compiled last summer, around 13,000 couples in England and Wales alone were forced to apply for insolvency over the previous 12 months. Had they addressed their debt issues earlier using debt consolidation it is possible that they could have avoided such a situation.