A new survey conducted by YouGov, a leading research and consulting organisation, suggests more than one fifth of GB households are struggling to keep up with their bills.

The reseach looked into how British households are coping with the credit crunch and revealed 21% of households (5 million) are now finding keeping up with bills a constant struggle or have fallen behind with their commitments.

In addition to that, nearly 15 million households, 63%, say their financial circumstances have got worse in the past 6 months, with only 13% seeing an improvement. This comes at a time when 43% of the adult population currently use an authorised overdraft, while 34% have a credit card that is not repaid in full each month. Only 30% have no borrowing at all.

The survey was conducted in consultation with R3, the Insolvency trade body, who are predicting dramatic rises in both corporate and personal debt in twelve months time.

‘Misuse of credit cards’, ‘borrowing without thinking about how to repay the money’ and ‘irresponsible lending by credit providers’ were seen as the top three causes of personal insolvency.

R3’s President Nick O’Reilly commented : “People’s attitude to debt has softened to an alarming degree and we are not surprised that people are borrowing with ‘no idea of how to repay’. The proliferation of credit cards in the late 90s has lead to a situation where 30% of the economy is based on consumer spending. Escalating house prices have given a false sense of wealth and provided security for less scrupulous creditors to lend irresponsibly.

“This is a situation that everyone will have their part to play in diffusing. The key point is that people should seek advice early from a qualified practitioner. The survey also revealed that less than half of those in serious financial difficulties have sought professional help to sort their financial problems which is deeply worrying. People should be less afraid of seeking advice than the consequences of not seeking it.”

There is evidence that households have already adjusted their spending habits. Giving more than one answer; nearly half, 48%, have spent less on ‘nice to have things’ (such as DVDs, CDs and jewellery) while 38% were buying more own label or value goods.