Britons borrow £77bn to go deeper into the red

Personal borrowing including credit cards other types of unsecrued loans increased by £11bn in 2007 to a three-year high of £76.7bn. Research by the independent financial advice database Unbiased.co.uk found that for every pound saved in the last quarter of 2007, the British public owed 52p. In 2006, 49p was borrowed for every pound saved.

Meanwhile, figures from Philip Hammond (pictured), the shadow Treasury Chief Secretary, revealed that the disposable income of the average working family has dropped from £26,200 in 2006 to £25,900 today, while UK personal debt is growing and stood at £1,412bn at the end of January.

"Consumer borrowing is now at a worryingly high level," said David Elms of Unbiased.co.uk. "2007 was a turbulent year with three base rate rises and the beginning of the credit crunch. It is doubtful we will see a significant improvement in 2008."

He added: "It has never been more important for people to take control of their finances, so it is great to see that savings levels have increased compared to 2006."

Meanwhile, personal loans – debts that do not include mortgages – increased to £9.8bn last year. The interest rates on these loans are now 0.5 per cent higher on average than they were last year, which means that Brits pay almost £1.5bn in interest alone.

Credit card debt has dropped slightly, from £55.6bn to £54.bn, but this still means we spend the equivalent of 70 days of the year earning the money simply to service the interest, Unbiased. co.uk has calculated, before we even start to reduce the debt itself.