One in four concerned about debts

Nearly a quarter of the population are worried they will not be able to keep up with their debt repayments in the next three months, research showed today.

About 24% of people are concerned they may not be able to pay back what they owe, with 29% admitting they are in danger of falling behind with their mortgage, according to CPP Group, which offers protection products.

The figures come as the Bank of England's monetary policy committee (MPC) is widely tipped to increase interest rates tomorrow.

Economists predict the MPC, which began its two-day meeting today, will raise rates by 0.25% to 3.75%, following evidence that the economy is beginning to pick up.

The research for CPP found that 22% of people are worried they will not be able to meet their council tax bill in the coming three months, while 12% think they will not be able to keep up with credit card repayments, and 10% are concerned about repaying their overdraft.

Elderly people are most worried they will not be able to keep up with bills during the next three months, with 51% of the over 55s worried about paying their council tax, and 19% concerned they won't be able to afford utility bills.

Shirley Woolham, of CPP Group, said: "The public is at risk from interest rate rises, which have been forecast before the end of the year.

"It is imperative that people act either before or as soon as they feel there is a problem."

At the same time a debt advisor said people's unsecured debt could grow by 50% during the next five years, to average ?235bn by 2008.

Debt Free Direct also warned that a rise in interest rates could lead to a dramatic increase in the number of people going bankrupt.

Chief executive Andrew Redmond said: "Interest rates are at their lowest level since the 1950s and people are borrowing more and more money.

"Around 16% of people have personal debts, excluding mortgages, of between ?10,000 and ?40,000.

"However, many are finding it increasingly difficult to make their interest repayments and, if the Bank of England base rate rises over the coming months as many people are predicting, there could be a dramatic rise in personal bankruptcies."

· TNS questioned 2,000 people for CPP Group during October.