Recent research, conducted by a financial website, has indicated that the level of borrowing that is taking place among British customers is still increasing, despite the credit crunch. The credit crunch means that lenders will have smaller values of money to give to borrowers and so they will add a higher rate of interest to the repayments and be more selective with, whom they give credit to.

Figures from Credit Action, a finance charity found that the rate of borrowing has risen by 30 per cent since August 2007 and the charity also stated that men are in 33 per cent more debt than women. At the same time, the total value of unsecured lending was valued at £215 billion and it is expected to increase, even as the country endeavours the credit chaos and the expected recession.

According to Credit Action, the average consumer who borrows finances, using credit cards or unsecured personal loans, had a value of around £4,500 to pay back in 2007, however the financial website believe that the value is 30 per cent higher in August this year.

The survey involved more than 2,000 UK residents and found the combine average credit value on store cards and personal loans stands at £5,886 over £1,000 higher than in August, last year.

The survey also found that people between the ages of 31-35 years of age had the highest value of debt coming from store cards, credit card and unsecured personal loans, which amounted to the sum of £7,276. The age group, which had the least, were those who were over 50, with an average value of £3,928.

Matt Edwards, a spokesperson said: "As people contend with rising fuel and food costs, it is no surprise that they have to borrow more. However, the downside of this will be the interest rates that could soon eat into people's pockets, as credit card and loan rates have risen considerably since the credit crunch began last year.

"A low level of personal debt for those over 50 suggests that the next generation of pensioners will be better placed than today's to deal with things like fuel poverty and recession."

Continuing on a positive note, Mr Edwards added: "Our research also showed that 70 per cent of Brits do not have unsecured loans, and 60 per cent of those with unsecured debt have credit/store cards of less than £1,000. This is good news as rumours of a recession circulate, people are going to need all the spare cash they can get their hands on, so large loan and credit card repayments could cause problems."

In related news it was said that the value of money owed by UK residents, was more than that of the country’s gross national income, for the second year in a row. This value amounts to around £ 1.444 trillion, according to the accounting firm Grant Thornton. The total amount of money owed through personal borrowings, such as on loans, has risen by 7.3 per cent in the space of a year, ending in June.

However within this same period, it was found that the amount of the country’s national income, which is also known as gross domestic product (GDP), has risen by only 5.1 per cent – or £1.441 trillion, a short fall of 2.1 per cent or £3 million, signifying that level of personal debt is higher than the value of national income.