People borrowed more money in the first quarter of 2007 than they did in 2006, meaning that they may need debt solutions like IVAs in the future, a new study shows.

Consumer website Unbiased.co.uk found that UK consumers borrowed 41p for every £1 they saved in the first three months of 2007. This compares to 35p in the final quarter of 2006.

In total, consumers took on almost £15 billion worth of secured and unsecured debt in the first quarter of 2007 - about £100 million more than in the three months before.

"It is worrying to see that savings rates have dropped by £6 billion compared to last quarter," the website's chief executive, David Elms, added.

"People need to realise that their savings are a crucial part of their financial planning and that the amount they save should act as an emergency fund to cover their outgoings and borrowings.

"Personal debt in the UK continues to rise and, as such, all the conscientious effort being made on saving money is being undone by continued increasing usage of credit cards, loans and overdrafts."

Indeed, recent figures from the Insolvency Service indicated that there were 4.7 per cent more IVAs in the first three months of the year when compared to the previous quarter.

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