Personal debt levels are likely to soar higher in 2008 as more Britons struggle to meet higher mortgage payments and secure low-cost loans, debt charities say.

The dual effect of five interest rate rises and the credit squeeze are set to have further repercussions this year as the more than 1m borrowers estimated to be coming off fixed-rate mortgages are forced to sign up for more expensive deals. Stricter standards for lending and a scarcity of deals on balance transfers and new loans are also likely to pose challenges to borrowers with high-levels of debt.