The fact that credit conditions have become so much tighter over recent months has not stopped consumers’ needs for finance - in fact, quite the contrary, because as credit conditions have become tighter living expenses have become higher, and this has made it even more necessary for many people to borrow money. However, with mainstream finance now well and truly out of reach for many people - especially those with damaged credit - the only alternative is to seek assistance from a doorstep lender.

Doorstep lenders have commonly been associated with offering finance to lower income people who have traditionally been unable to get finance elsewhere, and have also been linked to high rates of interest. One well know doorstep lender, Provident Financial, which also owns the high interest credit card Vanquis, which caters for those with damaged credit, recently reported that in the first half of this year there had been a rise of 34% in business, which clearly shows that an increasing number of people have been turning to lenders such as these as an alternative to banks and other mainstream lenders.

One industry official recently stated: ‘With the ongoing tightening of credit scorecards by high street providers, some of those seeking unsecured borrowing will face the prospect of even higher monthly repayments or being turned down for loans for which they would have previously been accepted.’

He added: ‘The tough economic conditions will see the likes of Provident Financial continue to fill its boots as the bigger lenders remain far more selective about the type of customers they are prepared to lend to. Whilst consumers may still be able to get their hands on unsecured funds, some are going to be faced with paying rates they would have dismissed out of hand just 12 months ago.’

Whilst many people have certainly gone down the doorstep lender route, those with decent credit ratings should bear in mind that there are still personal loans available from traditional lenders, and that by comparing different loans from a range of lenders they may still be able to get a competitive deal on their borrowing. Comparing loans can be done with ease and convenience online, and could save you a lot of money in interest compared to some of the more expensive alternatives.

The results of the survey went on to indicate that over the past year an individual’s debt has risen on average by around £2000. Experian used the 286 postal code districts in order to try and determine just how indebted the nation is. The conclusion that has been drawn from the study is that those living in areas with the highest house prices are those that have been able to run up more debt.

One official from the debt charity and advice service, Credit Action, stated: ‘Over the past 15 years Middle England has had it good but now they are feeling the squeeze. During the good times they have got used to borrowing money and having easy access to credit based on the mentality they should take on a lot of borrowing because their house prices will keep growing. It is these groups that are really now having to tighten their belts as they find commissions and overtime gets cut. Worryingly, I am afraid it’s is going to get a lot worse before it gets better.’

Over the past year a rising number of people and households have found it increasingly difficult to keep on top of their finances, and this is leading to severe financial problems for many.

An official from Experian said: ‘Those with the highest levels of borrowing are the most at risk and it is vital that they stay in control of their finances.’

However, a recent report has shown that there has actually been an unexpected drop in insolvency figures in England and Wales, and some officials have stated that this could be down to the fact that people are being far more cautious with their spending as a result of the ongoing global credit crunch. Insolvency levels in England and Wales have been falling for a number of years, but in the first three months of this year insolvency levels increased, and were expected to go on increasing due to the current economic and financial climate.

However, between April and June there was actually a drop in the number of insolvencies, falling by 2% to 24,553. The Insolvency Service has released these figures, and claims that the latest figures reflect a drop of 8.3% compared to the same period last year. The fall has been reflected in both the number of people filing for bankruptcy and the number of people entering into an IVA, or Individual Voluntary Arrangement, which is considered a softer alternative to bankruptcy.

However, whilst insolvency figures are down DMPs, which are informal arrangements made with creditors relating to repayments, are thought to be on the rise. Some officials have said that the drop in insolvency levels could be down to increased caution from consumers who are being as careful as they can over their spending as a result of the financial climate.

One official from the Insolvency Service stated: ‘I’m not sure the credit crunch is the sole factor in the decrease, but it is definitely affecting people’s decisions on how they should handle their debt. It is impossible to pinpoint one particular reason from these figures, but economic conditions and available credit are factors.’

Another industry official said that whilst insolvency levels have fallen ‘it’s important to bear in mind that this is from historically very high levels. The rates are still significantly higher than during the previous five years and I would expect this general upward trend in personal insolvencies to continue in the short to medium term.’

Over recent years IVAs, which are one form of insolvency, have been heavily advertised by a number of firms, who have been persuading consumers that they could write off a huge amount of their unsecured debt by entering into one of these agreements, but officials have warned consumers to think about the long term consequences before rushing into this course of action.

However, just as interest rates started to fall, living costs and bills started to rise, which meant that many households were still facing real financial problems. In addition to crippling household costs, many homeowners have been faced with trying to get a more affordable mortgage when their cheap deal comes to an end, but with the mortgage drought still ongoing there is very little around, and many have been forced to switch to their lender’s expensive standard variable rate because they are either unable to get a cheaper mortgage or they cannot afford the crippling arrangement fees that come with switching mortgages.

These and other factors have seen the level of repossession for the first half of this year rocket, and according to recent reports repossession levels have soared by 41% in the first half of this year. Industry officials have said that repossessions have now hit the highest level since the middle of the 1990s, with nearly nineteen thousand properties seized by lenders after homeowners failed to keep up with mortgage repayments according to the Council of Mortgage Lenders.

Michael Coogan from the Council of Mortgage Lenders stated: ‘The number of people facing difficulty needs to be kept in perspective. The good news is that most people are coping well and continuing to pay their mortgages in full, despite the higher costs of food and fuel and the higher mortgage rates now prevailing in the market for those coming off cheaper original deals. But it is inevitable that more borrowers’ coping strategies will come under pressure in current conditions than in the unusually benign years of the last decade. That’s why lenders, government and the advice sector are working closely together to minimise the impact on borrowers. ‘

He added: ‘No-one wants to see a household lose their home, and repossession typically leads to a loss for the lender as well. The focus of lenders’ arrears management policies today is on seeking realistic alternatives that balance the interests of customer and lender. Anyone who thinks they may be heading towards financial problems should contact their lender to discuss their options - the earlier the better.’

However, despite the terror that these problems can cause people, the economy is still very diverse and there are multiple facets to the same basic issues that allow you  to take a different perspective on the issue and potentially save your money in the process. Even if there is premonitions of a weakening automotive industry and housing market, the issues are still flexible and wide enough so that you can take your income and manage it wisely, thereby allowing you to maximize your savings and to have more spending money in general.

One of the easiest and most effective ways to ensure that you keep your money is to reduce the expenses that you incur on a monthly basis. This means to overlook the bills coming in and evaluate what it is you’re paying for and to decide whether or not you truly need those services or amenities. If you give it careful evaluation, you can find yourself realizing that you truly could go without a particular luxury or two and end up saving a large amount of income as a result.

Of course, even if you save money by cutting household expenses, there is always the matter of taking into consideration the things you are required to buy in order to survive. Food, utilities, gasoline, and other essentials all are very much necessary this day and age for every American, but these things can be adjusted in such a way as to cut the costs down to the bare minimum.

When it comes to food, do comparison shopping and reconsider your brand loyalty when looking for those particular food products that you and the family enjoy. You’ll find that based on the ingredients utilized, a lot of products are essentially the same thing but just packaged differently. Try a cheaper brand or a store product and see if you can appreciate the savings while enjoying a virtually identical product. Another good idea is to buy fresh food and try cooking instead of eating prepared meals.

When it comes to household expenses, conservation is the key. Keep in mind what you utilize and how often you tend to employ it, and then consider reducing the amount of electricity you consume by being conscious about the lights, electronics, and appliances in the house. You can also replace certain items such as light bulbs and small equipment with more efficient items that provide the same features but consume less power.

Gasoline is a tricky subject, as the cost just seems to keep rising, but this is still a worthy fight for your dollar. Try to adjust your vehicles accordingly to improve fuel economy by reduce unnecessary vehicle baggage, getting a tuneup, replacing your oil regularly and properly inflating your tires. Also, commuting with carpools is a surefire way to get what you need done for work without having to spend so much of your own money.

This imbalance leads to debt and that debt can lead to a whole slew of unwanted results. In an effort to restore balance, many consumers are looking for solutions anywhere they find and often times, what they find is not the right or even smartest solution available.

Everyone knows the dangers of predatory lending, and if some do not then they will no doubt learn all to well how dangerous these entities can be. Other, institutions appear just as legitimate such as pay day lenders who even have national branches that can be found in every city, big or small and can end up being just as dangerous.

Pay day loans are hailed as that quick fix just in the nick of time but the problem is a simple one. Once you take out that loan you are expected to repay it in two weeks and not only will you owe the initial loan amount but the interest as well. The interest rates on pay day loans are, on average, in the triple digits. So taking out a pay day loan will cost you extra and even leave you short on the next pay check locking you into a very vicious cycle that has the potential of leaving you in worse shape then where you started.

Another “solution” is to withdraw cash from retirement funds. The logic to this is that the money in there is just waiting to be used so why not use it now? Many consumers who find themselves in debt tend to be young and reason that they have enough time to make up the cash they withdraw. The problem is the additional fees, taxes, and even penalties for withdrawing from this fund prematurely making it impossible to replace what is borrowed. While this provides a fix in the present, your quality of life will be severely diminished in the future making this solution not worth it at all.

Now, some viable solutions to fix money woes can be as simple as having a yard sale. Do you really need that big screen television? Can you do without all those designer bags? If so, then think about putting them up on the auction block. Many find that by selling their cars and buying a cheaper or even used model will provide enough funds to cover some of if not all of what they owe.

Debtors should first look at their own lives and determine where extra money can be found before flocking to a quick fix scheme. Remember, if it’s too easy to be true then it probably is. If you are drowning in debt then look at non-for profit debt counselling institutions or even bankruptcy.

Fighting debt is not easy nor does it have an easy and fast solution. You will have to look towards the future as well as the present when searching for a way out of debt.

Compared to the first quarter of this year insolvency levels dropped by 2% according to figures, bringing the total number to 24,553. This also put insolvency levels for the second quarter at 8% lower than the second quarter of last year according to the figures from the Insolvency Service. Figures have fallen for both those entering into the softer form of bankruptcy known as an IVA or Individual Voluntary Arrangement, and for those declaring themselves bankrupt in the traditional way.

Officials have said that the global credit crunch was causing consumers to be more cautious with their finances, and that this had affected figures.

An official from the Insolvency Service stated: ‘I’m not sure the credit crunch is the sole factor in the decrease, but it is definitely affecting people’s decisions on how they should handle their debt. It is impossible to pinpoint one particular reason from these figures, but economic conditions and available credit are factors.’

Another official said that whilst insolvency figures had fallen in the second quarter ‘it’s important to bear in mind that this is from historically very high levels. The rates are still significantly higher than during the previous five years and I would expect this general upward trend in personal insolvencies to continue in the short to medium term.’

One industry official from a debt charity group stated: ‘In recent years there has been a ‘buy now, worry about it later’ culture in the UK when it comes to borrowing, particularly on unsecured forms of credit. For many pensioners today these figures show it’s a case of ‘bought then, worrying about it now.’

Another official stated: ‘As the cost of living is on the up, these figures, even if they are only part reflective of pensioners as a whole, are of real concern. Retirement should be a time to enjoy yourself after all those years of hard work, yet one in 20 people in their 60s, 70s and 80s admit to constantly struggling to keep up with financial commitments or having fallen into arrears.

He added: ‘The cost of living for the elderly has surpassed inflation over the past decade therefore it is more important than ever that consumers are aware of the dangers of approaching retirement with such large amounts of debt.’

Figures also showed that over the last twelve months contributory pension payments from adults have halved, and this will make things more difficult for the pensioners of the future in the UK.

Many household are struggling to make ends meet as it is, with rising petrol costs, increased energy and household bills, higher borrowing costs, and the soaring cost of food. Many people have switched to shopping at discount stores such as Aldi, Netto, and Lidl rather than the supermarket giants such as Asda, Tesco, and Sainsbury’s. However, the Prime Minister still reckons that a huge amount of food – and money – is being wasted each year by the average household.

There are a number of tips that experts have offered to help people to cut back on their grocery bills, as well as to avoid waste, and officials state that it is more important than ever to heed these tips in order to bring grocery budgets down for households. Nutritionists have stated that one way to cut back on the cost of shopping is to plan family meals a week ahead, so that you know exactly what you need to buy. You should then purchase only the things that you need rather than simply heading to the stores and loading the trolley with items that you may not need and could potentially end up throwing away.

Experts have also said that buy one get one free offers are another way to save money, providing the offer is on items that you regularly use and will eat. However, many people stick buy one get one free products into their trolleys simply because the offer is there rather than because it is something that they were planning to buy anyway – there is no point buying something that you won’t use simply because you get another one for free!

As many people have found shopping at discount stores can help them to cut back on the cost of shopping, but the problem is that there is not as much choice at discount stores as there is in the big supermarkets. Therefore, you may want to consider getting whatever you can from the cheaper stores, and then heading to one of the larger supermarkets to get the remainder of your items – but do look out for special offers on the items that you have to get from the larger stores, as supermarkets are in the midst of a food price war at the moment, and this means that they could be launching special offers on certain items.

Another tip that has come from the Prime Minister is the fact that many people throw food away once it reached the best before date. Mr Brown pointed out that once food passes the best before date is may not taste quite as good but it is still safe to eat. However, foods with a use by date may not be safe after the specified date, so consumers nee to differentiate between the use by date and the best before date before they start binning products.

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A recent business survey indicated that the UK economy was a ’serious risk’ of falling into recession within a matter of months. The figures from the report showed that business had tumbled amongst small and medium sized businesses in the service and manufacturing sectors over the past three months. The survey was carried out by the British Chambers of Commerce and involved surveying around five thousand of its member firms.

David Kerns from the BCC recently said: ‘We are now facing serious risks of recession. The outlook is grim and we believe that the correction period is likely to be longer and nastier than expected.’

The BCC added that the service sector has been particularly hard hit, and the number of firms that have reported falling orders has exceeded the number reporting increased orders for the first time since 1990.

Another official from the BCC said: ‘I am sending Alistair Darling and Gordon Brown a strong message from the businesses I meet every day up and down the country. To put more pressure on business would not only restrict business growth and hit the consumer hard, it would crush further what our economy is based on - confidence.’

A number of businesses have reported falling orders and business levels, but some economists are still hoping that the UK will manage to avoid recession. However, with many firms already cutting back on jobs, such as housing developers and builders, estate agents, and those in jobs related to housing, the future certainly looks bleak, according to many officials.

One shadow Treasury official said: ‘This survey will only add to British businesses’ concerns about the economy. Instead of being supported in these difficult times, they are facing more tax hikes because Gordon Brown failed to fix the roof while the sun was shining.’

As if the picture was not already bleak enough some industry officials have predicted that it could actually take as long as twenty years for the housing market in the UK to recover.

One official said: ‘House prices are expected to be below their August 2007 peak in a further 10 years’ time.’

An official from Capital Economics concluded: ‘The industrial section of the economy is already in recession. This means that all parts of the economy appear to be heading down at the same time, bringing the UK economy even closer to recession.’

Howard Archer from Global Insight added: ‘The bad news on the UK economy is coming thick and fast at the moment and the downturn appears to be depending appreciably.’

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