More than one in three people are concerned about the economic situation in Britain today [1]

and 15.3 million consumers feel financially worse off [2]

Close to the edge: the average person in the UK now sees over half (53%) of their monthly take home pay eaten up in debt repayments - 35% on mortgage payments and 18% on other debts [3].

The credit bubble bursts: write-offs by UK banks have soared by 70% on unsecured lending (£3.8bn to £6.6bn) and by 715% on secured lending (£20m to £163m) between 2004 and 2006 [4].

Total write-offs from January - June 2007 totalled £3.7 billion, almost as much as the combined UK retail profits (£4bn) made by HSBC, Barclays, HBOS, RBS Group and Lloyds TSB in the first 6 months of 2007 [5].

Close to the edge: over 10 million Brits (23%) acknowledge that their current level of borrowing borders on the unmanageable or is no longer manageable [6].

A further 9.5 million consumers (21%) have maxed out on at least one source of credit over the last six months [7].

Banks slam on the lending brakes: of 7.2 million people who applied for credit within the last three months, 38% were declined a new credit card and 19% were turned down for a new personal loan [8].

In addition, 6% of consumers [9] have had their credit limits cut.

Consumer confidence is crumbling as the reality of the 'credit crunch' starts to bite, according to a new report issued today by uSwitch.com, the independent price comparison and switching service.

Shock waves from the fall-out of the Northern Rock crisis, interest rate uncertainty and the slowdown in property prices have left over a third of people (35%) [1] concerned about the impact Britain's current economic situation could have on their own finances.

More than 15 million people (34%) [2] feel financially worse off today, and this in turn is taking its toll on lifestyle and spending plans.

More than half of consumers (52%) [10] say that now is not the time to make life-changing decisions such as changing jobs, buying a home or having a baby.

Cutting back In the last three months, 9.9 million people (22%) [11] say they have cut back on retail spending.

Moreover, major purchases such as home improvements and exotic holidays are being put on hold - only 3% think it would be a good time to borrow more against their home for major improvements, such as a new kitchen or replacement windows, 5% a good time to buy a new car, 6% to plan an expensive holiday and 3% to plan a wedding [12].However, this scaling back on spending may be too little, too late.

Britain's love of borrowing, fuelled by an era of easy credit, has left consumers more than £1.38 trillion in the red [13].

For some, the love affair has already turned sour.

Four million people (9%) are trapped in a vicious circle where they may need to get further into debt to meet existing financial obligations [14] and 5.8 million (13%) may need credit just to help meet their living costs[ 15].

Consumers fail to cope with debts Debt ridden Brits owe more than £217 billion [13] on credit cards and loans.

uSwitch.com's report shows that 10.3 million people - almost a quarter [6] (23%) - feel their current level of borrowing either borders the unmanageable or is no longer manageable.

In fact, over the last six months, 5.4 million people (12%) [16] have missed payments on debts and bills and one in ten (10%) [17] have had a direct debit, cheque or payment bounced by their bank as they have not had sufficient funds in their account.In the last six months, 21% of consumers "maxed out" on at least one of their sources of credit - 11% on a credit card and 10% on an overdraft [7].

Previously that wouldn't have been a problem - but with Britain's banks slamming on the lending brakes, the window of opportunity is closing for those looking to move to a better deal.

Bank write-offs soar In 2006, unsecured lending amounted to £19.6 billion [5].

However, almost a third (£6.6 billion) was written off.

This is equivalent to approximately 17% of the 'Big Five' banks' total group net profits (£38.5 billion) on all activities.

But, between January and June this year, debt write-offs totalled £3.7 billion - almost as much as the combined retail profits (£4 billion) of HSBC, Barclays, HBOS, RBS Group and Lloyds TSB during the same period [5].

Write-offs by UK banks on unsecured lending have increased by 70% (£3.8bn to £6.6bn) and soared by a staggering 715% on secured lending (£20m to £163m) between 2004 and 2006 [4].

As a result, banks are now reining in their lending.

In the last three months alone, over seven million people applied for credit.

Of these, 38% were declined a new credit card and 19% were turned down for a new personal loan [8].

Over the same period, 6%[9] had their credit limits cut by their bank.

This doesn't augur well for the two million credit card customers who are expected to be on the market for a new balance transfer offer in January [18].

Consumer confidence crumbles.

The research found that the average person now sees over half (53%) of their monthly take home pay eaten up in debt repayments - 35% on mortgage payments and 18% on other debts [3].

Not surprisingly, the increased cost of borrowing is hitting consumers hard - 23% are more worried about money and 18% are more worried about debt than they were a year ago [19].

The top five causes of concern among consumers today are [20]: Feeling less financially well-off (34%).

Reports in the media such as Northern Rock and the "credit crunch" (22%).

Uncertainty over whether interest rates are going to go up again (18%).

Job security is less certain (16%).

Mortgage repayments have/will be going up (12%).

Over the next six months, consumer confidence is likely to take a further battering - only 9% believe that the credit crunch will not impact on the average person[21].

People already think they are in for a bumpy ride.

One in ten (10%) think that they won't be able to pay all their household bills on time [22], 6% may have to default on credit card repayments [23] and 3% say that their home is at risk of repossession [24].

In fact, according to the Council of Mortgage Lenders, 45,000 repossessions are expected next year and 170,000 homeowners are expected to be three months in arrears [25].More worryingly given current levels of indebtedness, only 23% of people would not be left in financial difficulties following a life event, such as they or their partner losing a job, a serious illness or having a child [26].

Furthermore, 16% say that job security is less certain now [27], but nearly a quarter (23%) admit to having nothing to fall back on if the main breadwinner of their household lost their job, while 17% don't know what they would have to rely on [28].

In this situation, 39% of Britons would only be able to make ends meet without incurring additional debt for up to 3 months, while 20% would only last a month [29].

Despite these harsh realities, over a third (36%) of consumers have not changed their behaviour in the last 3 months in response to the economic climate [30].

However, there's bad news for retailers, especially with Christmas on the horizon.

As the credit crunch bites, more than 12.6 million (28%) say they will spend less this Christmas than last year - only 8% plan to spend more [31].

Despite this, one in ten (10%) still intend to borrow to pay for Christmas this year [32].

Ann Robinson, Director of Consumer Policy at uSwitch.com, says: "This is crunch time for consumers and it couldn't come at a worse time of year.

In the run-up to Christmas, traditionally one of the biggest periods of consumer spending, people are feeling less well-off and are worried about the future.

They are concerned about their jobs, their homes and their ongoing ability to manage their debts and bills.

The days of easy credit and the 'buy now pay later' culture may be numbered, but they will leave a painful reminder for those left struggling with debt.

"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."According to uSwitch.com, households can save up to £1,000 on household bills and financial products through a simple financial makeover.Take control of your finances by looking at all the areas where you can save money.

Don't see it as a chore - see it as an opportunity.

By saving on your outgoings, you are actually increasing your disposable income.Be proactive, not reactive.

Instead of just cutting back on basics or using credit/store cards to get you through the winter, take the opportunity to cut the cost of your basics (energy, home and mobile phones) throughout the year and check rates on credit cards, loans and insurance.Above all, stay in control.

It's easy in the face of feeling impoverished to let go of the spending reins altogether.

Recognise that risk and don't fall victim to it - otherwise the 'skint cycle' just gets prolonged.Keep your eye on the prize! Work out your monthly income and outgoings so you know your disposable income.

Look at how much you could save by switching.

Then look at that amount as a percentage of your disposable income and imagine how chuffed you would be if your boss offered you a pay rise of that magnitude.

Never forget that every saving made is a boost to your disposable income.

The most important thing is don't feel impoverished - feel empowered! Save up to £325 a year on your gas and electricity [33].

Save up to £150 a year on car insurance [34].

Save up to £200 a year on your home phone [35] .

Save up to £120 a year on broadband [36[.

Save up to £113 a year on your mobile [37].

Save up to £400 over 18 months on your credit card [38].

Save up to £387 over 5 years on your personal loan [39].

Save up to £83 over 12 months on your current account [40].

1.

According to the research, taking into consideration how they see the economic situation in Britain today, 35% of people are concerned about their own personal financial situation - 24% fairly concerned and 11% very concerned.

2.

According to the research, 34% (of 45 million adults = 15,300,000 adults) when asked what was causing them concern responded that they generally feel less financially well off than before.

3.

According to the research the average net monthly income is £1467, the average amount paid out each month on debt repayments (excluding mortgage repayments) is £267 and the average monthly mortgage payment is £515.

Therefore debt repayments (£267 + £515) amount to £782, which is 53% of the average net monthly income.

4.

Based on Bank of England data: total unsecured lending write-offs made by UK banks in 2004 = £3,872,000,000.

In 2006 this rose by £2,714,000,000 to £6,586,000,000 representing a 70% increase.

Over the same timeframe, total write-offs on secured lending rose from £20,000,000 in 2004 to £163,000,000 in 2006, representing a 715% increase.

5.

Based on Bank of England data: total write-offs made by UK banks in the first half of 2007 = £3,739,000,000.

In comparison, the banks reported the following H1 UK retail profits: HSBC (incl FD) £331,000,000, Barclays £651,000,000, HBOS £1,043,000,000, Lloyds TSB £803,000,000 and RBS Group £1,160,000,000.

These total £3,998,000,000.

In 2006, total unsecured lending was £19,663,000 (this is the banks' reported £13,077,000 unsecured lending + unsecured lending write-offs £6,586,000,000).

6.

According to the research, 23% (of 45 million adults = 10,350,000 people) describe their current level of borrowing as just about manageable (18%), no longer manageable (4%) or that they have resorted to an IVA (Individual Voluntary Arrangement - 1%).

7.

According to the research, 21% (of 45 million adults = 9,450,000 people) have "maxed out" on at least one source of credit over the last six months.

When asked which if any of the following sources of credit have you 'maxed out' in the last 6 months, 79% of respondents said this was not applicable i.e .they haven't maxed out.

This leaves 21% who have: 11% on a credit card, 1% on a store card, 2% on a personal loan, 10% on overdraft, 1% on their mortgage (they are at the maximum income multiple or affordability level) and 2% don't know on what sources they have maxed out.

8.

According to the research, 16% (of 45 million adults = 7,200,000) consumers have applied for credit within the last three months: of those applying 38% were declined a new credit card and 19% were turned down for a new personal loan.

9.

According to the research, 6% have had their credit limits cut in the last three months (not as a result of their own request).

These are: 2% on existing overdrafts, 3% on existing credit cards and 1% on another form of lending (not specified).

10.

According to the research, 52% of consumers say that now is not a good time to make any life-changing decisions such as changing job, buying a home or having a baby.

11.

According to the research, 22% (of 45 million adults = 9,900,000) consumers say that the main way their behaviour has changed in the last 3 months in response to the current economic climate is that they have cut back on retail spending.

12.

According to the research, given their understanding of the current economic climate and allowed to choose all that apply from a list of plans, purchases and investments, 3% of consumers think that now is a good time to borrow more against their home for major improvements - e.g a new kitchen, replacement windows etc - 5% thought it a good time to buy a new car, 6% to plan an expensive holiday and 3% to plan a wedding.

13.

According to Credit Action [Nov 2007] total UK personal debt at the end of September 2007 stood at £1,380bn.

The growth rate increased to 10.0% for the previous 12 months which equates to an increase of £120bn.

Total consumer credit lending to individuals in September 2007 was £217bn.

This has increased by 5.8% in the last 12 months.

14.

According to the research, when asked whether they agreed or disagreed with the statement that in the next 6 months they will need to get further into debt to meet existing financial obligations, 7% of consumers tend to agree and 2% strongly agree.

15.

According to the research, when asked whether they agreed or disagreed with the statement that in the next 6 months debt will have to fund their living costs, 10% tend to agree and 3% strongly agreed.

16.

According to the research, 12% (of 45 million adults = 5,400,000) admit to having missed repayments within the last 6 months: 7% on credit cards, 2% on unsecured personal loans, 1% on a mortgage and 2% on store cards.

17.

According to the research, 10% of people have had payments bounced at least once in the last six months due to insufficient funds in their bank account.

18.

According to uSwitch.com, the number of people that applied for a balance transfer card and switched a balance from October 06 to September 07 was 23.59% in January 2007 (uSwitch data).

By applying this to the number of balance transfers in 2006 of 8.9 million (uSwitch data), uSwitch.com estimates that the total number of balance transfers in January 2008 will be 2,099,374.

19.

According to the research, 23% of consumers said they are more likely to be worried about money now than they were a year ago and 18% said that they were more likely to worry about debt now than they did a year ago.

20.

Taken from the research and based on responses to "Which of the following are currently causing you concern?" The five responses which received the greatest percentage of consumer agreement have been included.

21.

According to the research, 2% of consumers stongly agreed and 7% of consumers tended to agree (9% in total) with the statement that in the next six months, the credit crunch is a business issue which will not have an impact on the average consumer.

22.

According to the research, when asked whether they agreed or disagreed with the statement that over the next six months they will be able to pay all household bills on time, 6% tended to disagree and 4% strongly disagreed (10% in total).

23.

According to the research, when asked whether they agreed or disagreed with the statement that over the next 6 months they may have to default on credit repayments, 5% tended to agree and 1% strongly agreed (6% in total).

24.

According to the research, when asked whether they agreed or disagreed with the statement that over the next 6 months their home is at risk of repossession, 2% tended to agree and 1% strongly agreed (3% in total).

25.

Taken from The Council of Mortgage Lenders' Housing and mortgage market forecasts: 2007-2008, issued October 2007.

26.

According to the research, when presented with a list of the main life events: losing your job, spouse/partner losing their job, death of spouse/partner, serious illness, separation/divorce, having a/another child and taking on long-term caring responsibilities, 23% of consumers said that none of these would leave them in financial difficulties.27.

Taken from the research and based on responses to "Which of the following are currently causing you concern?" 16% said that job security is less certain and was therefore causing them concern.

28.

According to the research, 23% admit to having nothing to fall back on if the main breadwinner of their household lost their job, while 17% don't know what they would have to rely on.

29.

According to the research, in the event of unemployment or loss of other source of income, 7% of people say they would be able to make ends meet without incurring (additional) debt for up to a week and 13% say between 1 week and 1 month.

This has been reported as 20% being able to last up to a month.

A further 10% say they could last between 1 and 2 months and 9% between 2 and 3 months.

The 39% reported to be able to cope for up to 3 months is the sum total of all these respondents.

30.

According to the research, 36% of consumers say that they have not changed their behaviour in the last 3 months in response to the current economic climate.

31.

According to the research, 28% (of 45 million adults = 12,600,000) say they will spend less this Christmas compared with last Christmas.

32.

According to the research, 10% intend to pay for Christmas spending mainly through borrowing: 3% overdraft, 6% credit cards and 1% by borrowing from wherever/whoever they can.

33.

At least 11% of people who switched dual fuel energy supplier with uSwitch.com between 1st February and 31th August 2007 saved £325 or more.

34.

At least 30% of people who switched car insurance provider with uSwitch.com between 1st June and 30th August 2007 saved £150 or more.

35.

At least 15% of people who switched home phone supplier with uSwitch.com between 1st February and 30th June 2007 saved £200 or more.

36.

A customer switching from the most expensive to the least expensive monthly package offering up to 8Mb unlimited broadband would save £120 over one year (correct as of 25th September 2007).

37.

uSwitch/YouGov research August 2007: 94% of adults surveyed have a mobile phone for personal use.

Assuming 45.4m adults (ONS) uSwitch.com calculates 42.68 million adult mobile phone users in Great Britain.

21% of mobile users have switched network in the last 12 months (8.96 million), making average individual savings of £9.44 per month or £113.28 per year.

8.96m x 113.28 = £1.02 billion.

38.

Transferring a balance of £3,000 from a credit card with a typical APR of 15.90% switching to a card with 0% on balance transfers for 13 months with a 3% Balance Transfer fee and a typical 14.9% APR - a customer could save £396 on the interest payable with uSwitch.com.

Saving calculated over 18 months with a 2.25% minimum payment.

39.

Transferring a balance of £10,000 from a loan with a typical APR of 7.8% switching to a low rate loan, such as Moneyback bank offering a typical APR of 6.3% - a customer could save £387 on the interest payable with uSwitch.com.

Saving calculated over 5 years.

40.

Transferring an overdraft balance of £677 with a typical EAR of 12.25% and switching to a Alliance and Leicester Premier Direct Current Account with 0% on overdrafts for 12 months, 5.9% thereafter- a customer could save £82.96 on the interest payable with uSwitch.com.

Saving calculated over 12 months.

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