The recession has pushed many Brits to the absolute limit as they struggle to meet bills and debts without credit and without any opportunity for wage increases.

In fact, according to Bright Grey, 39% of people would be in trouble if they had to find just £50 extra each month – this is worrying because just one credit card payment hike or one extra bill may tip those past their limit. Also, as many as 12 million Brits are currently struggling to cope with their monthly bills as it is. If bills were to increase by £50, this could rise to 18.8 million.

The average Brit spends £1,378 each month on essentials – equating to 68% of their average individual income. But more than half the population would find themselves in money trouble if their bills rose by just £100 a month, according to the insurer.

Roger Edwards, proposition director at Bright Grey says: "The report reveals the average Brit is just £155 away from a money meltdown. The frightening truth is that many Brits are already struggling to afford their monthly bills – and all it would take is a small increase in bills or drop in income for people to find themselves in trouble."

These figures are not a great deal in the grand scheme of things, particularly when you consider how low interest rates are at the moment and how they are expected to rise again. But only just scrapping through the month not leave a lot of leeway if bills were to increase, and it certainly doesn't give borrowers much chance to begin repaying debt – for many, their situation can only get worse.

That's why consolidation loans could be so helpful to Brits who just can't keep up. By using their home's equity, they can take out a secured loan and pay off all of their debts in one go, leaving them with just one manageable loan at a lower rate. They can then begin to save rather than spend and work towards paying off their debts.

SOURCE: Bright Grey, 24/09/09

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