Consumers are "extremely vulnerable"

The report warned that many people were "extremely vulnerable" to defaulting on their debts.

A rise in unemployment or interest rates could spark more people being unable to meet debt repayments.

Overall, the report found that 26% of people found it difficult to keep up with their bills and credit repayments from time to time.

What is more, 11% admitted it was a constant struggle or that they had fallen behind repaying their debts.

The findings come as the Consumer Credit Counselling Service said people were finding it increasingly difficult to get out of debt despite low interest rates.

EVERYDAY DEBTS 1 in 5 borrow money to cover household bills Around 12% only pay the minimum repayment on credit cards 12% in debt owe nearly �2,000 6% owe �10,000 or more 16% used credit to buy a car 8% used credit or a loan for a holiday

Latest figures from the Bank of England also suggest the average household debt has now increased to just under �6,900.

"Citizens Advice Bureaux helped with over 670,000 consumer credit debt problems last year," said David Harker, chief executive of the National Association for Citizens Advice Bureaux.

"Our research shows that a substantial minority of people are extremely vulnerable to even a slight change in their circumstances, which could saddle them with serious debt problems for many years to come."

The charity is urging people to be more aware of the problems of taking on too much debt.

Consumers are being advised on the risks of only repaying the minimum on credit and store cards each month.

According to Citizens Advice, a borrower with �2,000 on a credit card with an interest rate of 15% could pay �649 in compound interest over eight and a half years if he only paid the minimum 5% each month.

Citizens Advice has launched a new survey on its website - www.adviceguide.org.uk - to help people assess their financial situation.

Timing

The warning comes the day after the Bank of England said that people were borrowing record sums.

In particular lending secured against property was at a new high as people borrow against the increased value of their homes.

Halifax said house prices have increased at an average monthly rate of 1.1 percent over the past three months.

This compares with the 0.6 percent monthly average experienced during the past 20 years.

The average price of a house in Britain was �133,908 in August - more than four times the average annual salary.