“These increases are likely to continue, and worse, if there is even a slight downturn in the economy, even greater increases will occur,” warned the school’s director of external affairs Anne Kiem.

She called for improved financial education to equip consumers with “the crucial life skill of being able to manage their own finances”.

Meanwhile, Citizens Advice’s senior debt policy officer Sue Edwards warned that, although her charity’s bureaux had handled 65,000 bankruptcy problems in 2006, “we see many people too poor to go bankrupt”.

Ms Edwards welcomed the imminent introduction of a new solution for those unable to make Individual Voluntary Arrangements (IVAs), praising Debt Relief Orders as “a low cost, out of court insolvency remedy targeted at debtors with low incomes and few or no assets”.

The announcement last month that a new financial advice service for UK citizens is in the pipeline raised hopes that the government’s commitment to improving financial capability will roll out across the generations.

For more information about debt management, click here.

© Adfero Ltd