A disaster waiting to happen?

A combination of rising house prices and lower interest rates has encouraged many Britons to increase the level of their borrowing.

Leading debt charity the Consumer Credit Counselling Service (CCCS) has warned that any rise in unemployment could leave many Briton's, particularly homeowners, struggling to keep up with debt repayments.

Homeowners that take home less than �18,000 are said by the charity to be most at risk if the economy sours.

Debt prone

The CCCS has looked at more than 50,000 individual debt cases that it dealt with between 1998 and 2002.

If unemployment were suddenly to increase, it is likely that a lot of people would be caught out Malcolm Hurlston CCCS chairman

The charity found the average level of debt in those cases had increased from �12,000 to �18,000 over the four year period.

Younger people were the most debt prone, with the majority of those reporting problems falling in the 25 to 39 year old age bracket.

Women were in the majority when it came to needing help with debts, while men in difficulty owed more on average.

Homeowner debt

People on lower incomes - below �500 per month after tax - were, unsurprisingly, struggling the greatest under the debt burden.

On average, people in this income category owed 40 times their monthly income. The debt charity said some would have suffered a sudden loss of income through illness, divorce or unemployment.

Debt levels are higher among house buyers than among renters. Between June 2001 and January 2002, the average debt excluding mortgages, for buyers was �22, 928 compared with �13, 423 for renters.