A new report by independent price comparison and switching service, uSwitch.com, reveals the heights that the nation’s passion for spending hit before the high street plummet that saw the worst December trading since 2004.

Brits are working harder than ever before, yet almost one in three have nothing left in their bank account at the end of the month. Every month, 4.8 million consumers spend more than they earn, nine million just break even, and the average consumer has just £157 left in their bank account when all else has been paid.

The study into the nation’s spending habits paints a picture of a ‘work hard, play hard’ nation, with consumers using debt to fund their luxury lifestyle. Between 1997 and 2007, spend on non-essential items has soared at 2.5 times the rate of inflation, growing by 65% against a modest 48% rise in net income. Over the same period, debt repayments have rocketed by 104% as almost six million consumers resort to borrowing every month to meet their outgoings.

Ann Robinson, director of consumer policy at uSwitch.com, said: “We are caught in the grip of a spiral of conspicuous consumption where it’s no longer enough to keep up with the Joneses, but instead we want to live like our favourite celebrities. But it’s clear that our salaries can’t keep up with our Hello lifestyles. The shock reports from the high street are the first signal that this trend is changing and, with the credit crunch beginning to bite, consumers need to start paying serious attention to their spending habits.”

“The disastrous December sales figures show that consumers have started reining in their spending. But the shock reports barely scratch the surface of the struggle facing consumers this year. Now is the time for a financial makeover and for everyone to take a long hard look at their budget.

“Short-term debt solutions may seem an efficient way to fund spending, but they can also lead to long-term debt if not managed properly. The average UK adult has just £157 left over at the end of every month – but by switching providers and managing expenses in a more efficient way this could be almost doubled.”