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There were 25,717 personal insolvencies in England and Wales in April to June - a three percent increase on the first quarter of the year, according to figures by the Insolvency Service.
A Treasury spokesman has insisted that the government is taking action to alleviate financial pressures as a report showed that more than half of Britons are struggling to keep up with bills:
A survey by the Money Advice Service suggests the economic downturn has created a "live for now" culture, which is preventing people from saving enough for their future.
Of those respondents questioned:
- 21% said they would rather have £200 now than £400 in four months time
- 42% would have to think about how they could cover an unexpected £300 bill
- 25% prefer to live for today rather than plan for tomorrow
The report also uncovered a worrying lack of financial knowledge - some 12 percent people believed the Bank of England's base rate, which has been at a historic 0.5 percent low for more than four years, is over 10 percent.
A study by the Money Advice Service found that income per hour in the UK has dropped by six percent in real terms since 2006.
The Financial Capability Of The UK report states there was "a general feeling that people worry about their ability to make it to the next pay day".
It added, "Because of this, people are focusing more on the here and now than on planning for the future, including for unforeseen emergencies."
More than 5,000 people took part in the survey and more than 70 families were followed over the course of a year.
Around nine million more adults are struggling with money now compared to seven years ago, a report by the Government-backed Money Advice Service suggests.
Of those surveyed, 52 percent said they are living on the edge, which equates to 26 million people across the UK.
This is a sharp increase from 2006, when 35 percent said they were having difficulty keeping up with bills.
The service also found that many people are suffering from poor financial skills and the squeeze on families following the economic downturn has encouraged a "live for now" culture.