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“The government is looking tired and stale, and Brown has been tarnished by that,” said Peter Kellner, chairman of YouGov Plc, a polling company. “On its own, the budget won’t be enough to turn around Brown’s fortunes. It will be part of a bigger process to win back support.”

Debt reduction has not been a main priority for Britain’s budget since 2003. Brown expects a deficit of 2.8 percent next year.

“He doesn’t have much room to maneuver,” George Bull, of tax at Baker Tilly Financial Services in London, said. “He should take measures to boost competitiveness, but he doesn’t have the money to finance a cut in tax.”

“The rise in public spending as a share of GDP in the last five years has been striking,” Brian Coulton, an analyst at Fitch Ratings Inc., said in a note to clients. “It has been sharper than the previous episodes of rapid growth over 1980-83 and 1989-1993, both of which encompassed two major recessions.”

Most consumers are unable to fathom the limits of government debt.  However, the more loans the government carries, the more burden is put on the average consumers.  Many consumers are hoping for tax breaks.

Consumers are rarely interested in the budget, beyond learning whether it will offer financial relief.  Tax relief increases consumer’s ability to repay their own personal loans, or secure future loans.

Consumers are frustrated at the government’s attempts to curb their own spending through increased taxes on loans, while increasing the national debt through their own spending.

The UK banks are preparing to defend their market against the same problems seen in the US sub-prime market.

Will the US situation hit the UK? Boulger of mortgage broker John Charcol does not think so. ‘But it is something the regulators will be taking into account. A lot of borrowers in the US were on short term ‘teaser’ rates and suffered payment shock when they moved to the standard rate.’

This is something that many UK consumers are being faced with. Despite the UK’s belief that their market is immune, there are parallels between the markets.

‘In the UK it is looking more and more likely that the Bank Base Rate will peak at 5.25%. I would put it at a 50-50 chance. Even if the economy does suffer because of what is happening in the US, we will be less susceptible to a downturn as we have lower exports to the States.

‘In addition we don’t have the same high proportion of sub-prime borrowers on 100% home loans. But if there is any tightening of lending criteria it is going to happen in the sub-prime and adverse markets,’ Boulger says.

Boulger believes that ‘the lenders have found that credit scoring is a very efficient predictor of those borrowers who will default,’ Boulger says. ‘You can never be certain, but I don’t think in the short-term what is happening in the US will affect lending criteria here.’

This is dividing the market into two segments, those who will strengthen the market by investing in property to build wealth, and those who will undermined it by borrowing mortgages which they cannot repay.

If you are looking to get a loan, your credit history can have a big effect on the outcome of the loan.  If you have bad credit you will have to expect a higher interest rate, or you may be required to take out a secured loan.  That is why many people strive to build a good credit history.  Although building a good credit history may be hard for some, with time, discipline and hard work you will be able to build a good credit history.

To start rebuilding your credit history you will need to develop a budget and live by it.  Through a budget you will be able to know how much money is coming in every month and how much you are spending.  By listing all your income sources against your expenses you will be able to know how much you will be able to afford should you take out a loan.  You should never take on a loan that you are unable to comfortably afford.

Budgeting will help you keep track of your expenses and allow you to maintain better control on your finances.  Other things to consider to ensure your credit report will reflect a good credit history is to pay your bills on time and to pay them in full.  This includes your credit cards, store cards, or utility bills.  You will also want to review your credit report annually to ensure that there are no errors or suspicious activity.  If you find that there are errors on your report then you will want to take the necessary steps to remove them from your report.

The charity Consumer Credit Counselling Service (CCCS) advised 50,472 people between June and December 2006.  This is a 66% increase in the number of people with debt management problems that it helped  during the same period in 2005, to 30,450.

The CCCS said this is due to the fact that they are expanding the services they offer UK consumers. However, the charity also points out that single people in the UK as now the most vulnerable to debt related problems.

A Debt Counsellors survey claims that  22 per cent of married consumers do not tell their spouse about their debt problems,  and 27 per cent have kept debt problems a secret from the person they are living with.

There are several venues that believe many of the problems single people face are caused by their partner’s ‘hidden’ debts.  Many of these consumers may expect to separate assets when they divorce.  However, more and more, UK consumers are finding that their wealth is swallowed up by hidden debts, and that all the couple has to separate are debts.

This problem will only grow as recent figures suggest that 1 in 5 UK consumers are considering bankruptcy.  This translates to almost 9 million consumers who feel that their debts are so high they must declare bankruptcy.

However, the number of people who are having trouble repaying their debts has dropped by 7 per cent from last October.  The number of people who have problems paying their monthly debts and bills has dropped 40 per cent.

Millions of Brits are now deep in debt and not ashamed of owing money. In fact, it is more of a stigma to rent and remain out of debt, or even build wealth, than it is to be hopelessly in debt and forced into bankruptcy.

Debt is now the norm in the UK. Teenagers start to build debt while still at school, and not on student loans, but on clothing and luxury items.

College students owe an average of £28,000.

Married couples owe their combined wages for four to five years to come. In many households, this debt excludes the mortgage.

The current figures claim that the UK personal debt levels increases £1,950,000 every 3.85 minutes according to Credit Action, a national money education charity.

“Our passion is to help people stay in control, rather than let money control them and disrupt their lives through over indebtedness,” says a spokesperson.

A Conservative Party poll suggested that as many as 9 million people are struggling to cope with serious debt problems. However, the Bank of England counters by claiming that 53 per cent of the people they polled expect to clear their debts by the end of 2007, excluding their mortgages.

This is hard for some watchdog groups to believe.  Currently, there are more credit cards than people.  APACS states that, in 2005, there were 74.6 million credit and charge cards compared with 60 million people.

The Financial Services Authority said that almost a third of all teens and young adults between 16-24 years old cannot manage a weekly budget.

The Authority, a statutory body set up under the Financial Services and Markets Act, said that 94 percent of all 16-year-olds believe it is important to know how to manage money, but only 53 percent are taught how to do so.

For people with bad credit, or no credit, it can be difficult to obtain a loan.  However there are lenders who offer loans for those with bad credit.  Majority of lenders only offer secured loans because they consider lending to those with bad credit a risky investment.  A secured loan means that the lender will require some form of security for the borrower that is equal to, or more than the loan amount.  The security offered by the borrower is usually their home or property.  However secured loans can become a bad decision if you fall back on payments, as the lender will be able to repossess the property to reclaim their funds.

When you apply for a bad credit loan, the lender will first check your credit score to determine if they will lend to you, it will also help them to determine what interest rate they will offer you.  Typically the interest rate that is offered to those with a bad credit history is higher than a standard loan rate.  The rate is higher because lenders are protecting their investment.  However, as with any loan the interest rate that lenders offer you depends on your personal situation.  It is best that you compare rates from various lenders to ensure you receive the best possible rate.

Bad credit loans are usually offered by lenders who have access to a variety of loan plans allowing them to offer you the lowest rate that fits your personal situation.  Those who have a better credit history are more likely to be offered a lower interest rate than someone who has a poor credit history.  However, you should be wary of any lender who offers a rate that you feel is extremely high.  You should never feel obligated to sign for a loan if you do not feel you are getting the best rate or the best service.

A strategic cross-government published ‘Tackling Over-indebtedness: Action Plan 2004′. Progress was released in “Tackling Over-indebtedness: Annual Report 2006″ published in September.

Two pilot teams were established by Department of Trade and Industry DTI to work with local trading standards offices in Birmingham and Glasgow in September 2004.  The government has taken the initiative and committed 1.2 million to continue the Birmingham and Glasgow projects for another year.  They also hope to extend the operations into Liverpool, Sheffield and West Yorkshire.

This project is preparing to roll into England and Wales in August, 2007.  Research published by the DTI last December suggests that the specialist teams are having considerable success in tackling illegal lending by firms they label as loan sharks.

However, the research shows that the UK, with an efficient and diverse financial services market, already has a low incidence of illegal lending when compared to other European countries.  Still, 165,000 households in the UK use illegal money lenders.

Half of these consumers are among societies poorest, concentrated in deprived urban housing estates.  These consumers are often denied affordable personal loans and have a hard time accessing legal alternatives.

The Government has tried to inhibit the loan shark’s ability to thrive.  They allocated £36 million to credit unions and Community Development Finance Institutions to increase the supply of affordable and appropriate credit for the financially excluded.

They also allocated £47.5 million to a DTI project recruiting and training 500 new money advisers to increase the availability of money and debt advice for those who need it most.

The research into illegal lending can be found on the DTI website.

Debt Free Direct chairman Mike Blackburn, former chief executive of the Halifax, blames the increase in personal insolvencies on the banks.

“We are where we are because of excessive and imprudent lending decisions made by creditors, who end up with debtors strung up with debt they would never be able to deal with,” he said. “Why have the banks been squealing of late over their provisioning? Debtors are having credit thrown at them.”

The total number of personal insolvencies jumped in 2006, at least 45% to 67,584 cases. Debt Free Direct (DFD) estimates that 1m to 2m people are irreversibly over-indebted and will never be able to repay the capital on their loans.

The banks made £37bn in profit in 2006.  The banks have been criticised by several debt management charities for their careless lending.  Banks are deflecting the blame on individual voluntary arrangement (IVA) firms.

The banks claim that debt-management firms are selling unnecessary IVAs to consumers who do not need their services. The number of IVAs taken out last year increased from about 20,000 to 45,000 and their value increased from 15% to 30%.

HSBC raised the issue after its six months bad debt provisions increased in 2006 from £265m to £361m.

Recent reports suggest that banks are acting irresponsibly by releasing figures which states that teens are in serious debt because credit card companies have been lending unsecured loans to high school students.

Other reports have brought to light the fact that banks are issuing loans without asking clients for proof of income or referencing their consumer credit information.

A secured loan a loan in which the lender requires the borrower to provide some form of security, such as the borrower’s property.  Secured home-owner loans are available in different amounts and can be borrowed for different purposes.  The amount that you can borrow ranges from £3,000 to £50,000.  There are some lenders who will consider lending up to £100,000; it all depends on the lender and how much security the borrower has to offer.  The amount that is borrowed can be repaid monthly over an agreed term, anywhere from three years to twenty five years.  Often, if you repay the loan earlier than agreed you can be charges a penalty.

The interest that the lender charges depends on the equity that you have in your property and the lender’s view of your ability to repay the loan.  The APR that is quoted by the lender is usually the typical rates and act, as a guide for what rate should be offered on an individual basis.  When you are looking for a secured loan you should compare the APR on the loans that are offered.

Typically secured loans are easier to obtain than unsecured loans because then the lender has security on the money that is being borrowed.  A secured loan is useful for larger amount where the applicant requires a longer repayment period.  This type of loan is ideal for those who are self-employed, have recently changed jobs, or have adverse credit.  If you find yourself in one of these positions, then you should consider a secured loan.

Whilst debt can help consumers start their lives quicker, often helping people reach a comfortable lifestyle a decade earlier than normal, it is also a form of slavery where the consumer is forced to make banks and financial companies rich in exchange for that decade.

Many consumers who borrow a homeowner loan this year will find themselves indebted for 40 years, or more, for the privilege of owning a home, despite the fact that the banks are raking in billions in profits each year.

Britain’s personal debt increases by £1 million every 3.85 minutes.  This increase is reflected in the number of consumers seeking debt management assistance.

Consumer Credit Counselling Service (CCCS) said that the average debt of consumers who contact them rose to £31,000 in the third quarter of 2006.  This is an increase of £2,283 over the last quarter in 2005.

A Bank of England survey estimates that 6 million UK consumers are struggling with their financial burdens. A poll conducted by the Conservative “state of the nation report” suggests that the number of adults who struggle under serious debt problem is now as much as 9 million.

This is a 7.7 per cent increase in the number of households struggling to repay their mortgage, according to the Bank of England.  However, the Bank of England does continue to explain that this represents a very thin sliver of the UK economy.  The BoE believes that the average consumer is still financially healthy, building wealth, instead of struggling to keep out of insolvency.