Bad - People 'Under Rising Financial Pressures'

About a quarter of Britons are struggling to keep up with repayments on mortgages and other debts, new research indicates.

A study carried out by KPMG reveals that 22 per cent of consumers - about seven million individuals - are developing problems with handling demands on their finances. In addition, it was indicated that over a fifth (22 per cent) of people are looking to borrow money to supplement their day-to-day living costs. Such consumers, the company revealed, are making use of loans and other types of credit to pay household bills, food costs and mortgage payments. It was also suggested some 11 million people believe that they are going to come under more pressure to keep up with repayments as the year progresses.

One way consumers may find that allows them to keep up with payments on various financial demands, however, is to take out a low-rate loan for debt consolidation purposes.

Research from the firm also revealed that about half of those surveyed believe that the social stigma attached to debt has decreased during the past decade. Meanwhile, an estimated 42 per cent claim that such a perception has fallen over the last five years, with about a quarter pointing towards a drop taking place in the last 12 months. Furthermore, just under half (48 per cent) of 18 to 24-year-olds who are between 10,000 pounds and 19,999 pounds in the red are happy to discuss debt with their friends. Conversely, less than a fifth of those over the age of 55 owing between 2,500 pounds and 4,999 pounds are willing to have such conversations with their peers.

Steve Treharne, partner and personal insolvency practitioner at KPMG, said: "Those people who have been robbing Peter to pay Paul, transferring balances from card to card, remortgaging and taking equity out of their property to pay off spiralling debt are fast running out of options. The credit crunch is already seeing credit card companies reducing limits and increasing their rejection rates for new customers.

"People who previously had access to competitive mortgage deals, despite being late with a couple of payments, are going to find it very difficult to find a deal. Combine all of this with increasing energy, council tax bills and petrol prices and you can see why we are predicting a record 130,000 personal insolvencies this year."

The KPMG partner went on to claim that as pressures on the over-indebted increase many may find their home will be repossessed as the "final straw". He added that in an attempt to avoid this happening consumers are looking towards the various methods of filing for insolvency, such as bankruptcy or an individual voluntary arrangement.

However, for those who have struggled with money in the past and are looking to avoid damage to a credit report that insolvency can bring a bad credit loan may prove to be of assistance. Earlier this year, a study by the Alliance Trust Research Centre revealed that Britain's financial wellbeing dropped by ten per cent between the third and fourth quarters of 2007 to reach 79.7. One of the lowest scores ever recorded, the institution claimed this was due to consumers struggling with increasing transport and food costs and facing a higher burden of debt than in previous years.

For such consumers a poor credit loan could provide financial assistance and help them get back on their feet quickly.