One in ten borrowers feel that their debts are out of control, new research has suggested.
With the cost of basics such as energy and food on the rise, more people are struggling to cope with their financial difficulties, the survey from moneysupermarket.com has revealed.
It showed that 31 per cent of people have taken out a loan in order to consolidate debt.
Furthermore, 62 per cent of these go on to borrow more in addition to the original loan.
Spokesperson Tim Moss remarked: “Many people’s finances are being stretched to breaking point by the spiralling cost of living and the credit crunch.”
He urged people to seek advice before burdening themselves with extra debts.
Meanwhile, the government has been accused of having a “knee-jerk panic reaction” to the pensions crisis and the credit crunch.
It is now safer to put money into a bank rather than a pension scheme, according to independent adviser Dr Ros Altmann.
By Jamie Price