The latest reports are suggesting that the UK pubic are accumulating large debts on credit and store cards as they are not able to meet the unexpected bills.

Research done by Abbey show that we spend around £48.7 million a year on unexpected bills, which is 79% people say they didn’t budget for. Things like unexpected taxes, bill or fees, even birthdays and wedding all contribute to these money worries.

It is estimated that the unexpected bill and cost are around £1375 each time they arise, this puts people in the position where they either use saving or use credit cards and over drafts to meet the costs, which in turn increases the debt further due to interests on money borrowed.

In a survey, 37% said they would use savings to meet the unplanned costs, while another 37% said they would get into debt on a credit card and 13% would use an overdraft facility.

We all know that life has a strange way of throwing things at you, particularly when you least expect it, but you can prepare for these bills by using a savings fund or over estimating your planned monthly budget.

Most experts suggest building a fund of at least 3 months salary in an instant access cash account to help with these unexpected bills.

Recent information from ‘Credit Action’ outlined the total amount of personal debt in the UK topped £1.3 trillion at the end of April 2007 with UK consumers borrowing more and saving less in the first quarter of this year.

Consumers took out almost £15 billion worth of secured and unsecured debt in the first 3 months of 2007, that’s almost £100 million more than in the previous 3 months.

The ratio between how much consumers are borrowing, not including mortgages, and how much they are saving has now climbed to 41p borrowed for every pound saved.

That compares to 35p in the previous quarter and an average of 36p for 2006.

Personal debt in the UK continues to rise for a number of reasons and all the conscientious effort being made on saving money is being undone by continued increasing usage of credit cards, loans and overdrafts.

Further research has also shown that only 49% of people are saving enough for their later years and 24% cent are not saving at all.

Women, the self-employed and people in debt are among those least likely to be on track for a comfortable retirement as Britons have amassed a record personal debt mountain of more than a £1 trillion after interest rates hit a 48-year low of 3.5% in 2003.

If you are having issue with you debt and owe more that £15,000 to more than one creditor, contact DeleteDebt.co.uk for free debt advice for your financial circumstances – we provide IVA advice and Debt Agreements that will set you on the path towards being debt free.