Toucan

Debt levels have soared by almost £800 million compared to last year while savings are down by over £4 billion, research has shown.

Figures from Unbiased.co.uk show consumer borrowing was £5.9 billion in the second quarter of 2008, a £757 million rise from 2007.

However, saving levels have dipped from £42.9 billion in 2007 to £38.5 billion in 2008.

David Elms, chief executive of Unbiased.co.uk, said: "With the credit crunch firmly gripping financial markets, it is now more important than ever for consumers to take control of their finances.

"People are currently feeling the pinch - but this will only continue to get worse if they are both increasing the amount they are borrowing and reducing the amount they are saving."

According to the research, for every pound UK consumers saved during the second quarter of 2008, they borrowed 15p. This has increased from 12p borrowed against every pound during the second quarter of 2007.

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