Increasing numbers of people are expressing concern about the future of the UK’s economy and its impact on their personal finance situation, it has been suggested.

The latest data from price comparison and financial advice service uSwitch reveals that, in many aspects of their monthly financial management, UK consumers are feeling the pinch. Data from the firm reveals that more than ten million Britons are worried that their current level of borrowing – for example in terms of mortgages, UK personal loans and credit cards – either is very close to, if not already in, an unmanageable situation. Many such borrowers might benefit from investigating loans to consolidate debts as a means of beginning financial recovery.

Further research from the firm suggest that a similar figure (9.5 million) have reached the limit of at least one form of borrowing in the last six months, whether through credit cards, bank overdrafts or loans. Meanwhile, those hoping to pursue further credit through plastic cards in the coming months may find the solution unavailable to them: the price comparison firm believes that credit card providers are tightening criteria in the wake of the recent crunch in financial markets. This has resulted in 38 per cent of the 7.2 million who applied for such credit being declined. In comparison, only 19 per cent were turned down when they applied for personal loans. At the same time, more than one in 20 people (six per cent) have had their credit limits sliced as providers consolidate their positions.

Analysing the data collected, uSwitch says that “debt-ridden Brits” are failing to address their financial situations in good time. The firm states that the 217 billion pounds debt mountain is not being paid off at the rate that it should be. It supports the assertion with figures suggesting that 5.4 million people (12 per cent) have missed payments on debts and bills in the last six months, while one in ten have had a direct debit or cheque bounce from their current account. Any consumer finding themselves in a situation where they are forced to default on debt payments might be well advised to investigate cheap consolidation loans as a means of regaining control and beginning to reduce their borrowing burden.

A number of reasons were cited as cause for concern to today’s cash-strapped Brits. Over a third (34 per cent) said that they simply felt less well off, while one in five (22 per cent) were worried by media reports of Northern Rock and the credit crunch. Meanwhile, interest rate uncertainty and diminishing job security are also playing on the minds of the nation’s borrowers. This is not to say that they are not addressing the situation: to keep the wolf from the door more than a fifth have cut back on retail spending, while others have put home improvements and far-flung holidays on hold until they feel more financially stable.

However, debts already accrued must also be addressed, whether through a debt consolidation loan or other means. While frivolities may have been suspended, UK consumers collectively remain some 1.38 trillion pounds in the red.

Ann Robinson, director of consumer policy for uSwitch, said: “More than half our take home pay is now eaten up by debt repayments, but our ability to repay and manage this debt is clearly faltering. The banks are being forced to write-off vast sums and, as a result, they are tightening their lending belts. This means that credit will become both harder for consumers to get and more expensive.

“The credit crunch will claim casualties – it will be enough to tip some over-indebted households over the edge. But there are positive signs that consumers are already cutting back, curtailing spending and trying to clear their outstanding debt. With a careful eye and a steady hand on the household budget, most should be able to weather the storm.”

The price comparison site is not the first to call on consumers to rein in their spending and proactively address their debts. Earlier this month, debt advice organisation Callcredit stated that Britons needed to take a good look at their borrowing to establish where they could make savings. With debts set to rise in the remaining weeks of this year, the organisation stated that borrowing habits were the responsibility of both consumers and lenders and that Britons should be sure to manage their debts sensibly. As a result, consolidating debts into a cheap loan could be one way in which to provide help in getting to grips with spending.

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