Finances are unlikely to improve in 2012, so those in retirement may want to follow one expert's advice when it comes to managing their money over the next few months.

Director of Chapters Financial, Keith Churchouse, urged people to think "long and hard about their weekly and monthly budget".

This will enable them to look at their outgoings and assess where they may be able to cut costs to ensure they can meet their regular expenses.

Mr Churchouse suggested that if individuals are fortunate enough to come into some money, they should "think very carefully about saving this to make sure that they can smooth any shortfalls in the future".

He added that rising inflation has increased the financial pressures on much of the population.

Plenty of people could follow this advice, as research conducted by Gocompare.com at the end of last month revealed 49 per cent of individuals want to sort out their finances and reduce their outcomes in 2012.

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