More people are being forced to take on new forms of debt to make ends meet, research suggests
Struggling consumers spend one week a year worrying about their finances as savings plummet and personal debt levels spiral, according to new research.
A report looking into the effects of the economic downturn on people's quality of life has found the average person now spends three hours and 15 minutes a week fretting over their money.
It comes as a further squeeze on budgets in the last 12 months means living standards are now at their lowest since the 1920s.
More people are being forced to take on new forms of debt to make ends meet and almost half of young people aged 18 to 29 run out of money every month.
The findings were published in the first of a series of Quarterly Consumer Reports by Which? into how people in Britain are coping with the financial downturn.
Which? executive director Richard Lloyd said: "Consumers in Britain are going through the tightest squeeze in their living standards since the 1920s. Many consumers are clinging to the edge of a financial cliff with savings at rock bottom and personal debt levels sky high. Shocking numbers of people say they are forced to take on new forms of debt just to make ends meet, and many more would not cope with unexpected shocks to their incomes or household bills."
More than 2,000 people were surveyed for the report, with more than half admitting mistrust in the Government and the banking system.
Young people aged 18 to 29 have borne the brunt of the impact on living standards with a fall in purchasing power of twice the national average, according to the report. They also have more debt than any other age group, owing 47p for every pound they earn, compared with the national average of 21p. But those in the lowest bracket of income, £12,376 or lower, on average owe 72p out of every pound they make.
Mr Lloyd said: "Which? wants to see confident consumers and strong businesses driving economic recovery, but the consumer has too often been an afterthought in the Government's growth agenda. With this new report, we show just how well those with power, both in government and business, are doing at putting consumer wellbeing first."
The quarterly report also includes a new spending power index, which concluded there was an ongoing decline in standard of living over the last 12 months of -0.9%.