Research from Abbey shows that Britons spent 48.7 billion on unexpected bills in the last year and that 79 per cent of people admitted that they had not budgeted for these unexpected costs.

Unplanned building work, unexpected taxes, bills and fees, and forgotten birthdays and weddings all contributed to financial difficulties.

Typically, unexpected bills and costs amount to 1,375 each time, putting people in the position where they have to use their savings or go into debt just to meet the costs.

Of those surveyed, 37 per cent said that they used savings to meet their unplanned financial costs while a further 37 per cent put thedebt on their credit card and 13 per cent went into their overdraft.

While it may sometimes be hard to know what bills life is going to throw at you, you can prepare for the unexpected through building up a buffer savings fund and drawing up an over-estimated budget plan.

Most experts will recommend that you build up a fund of at least three months salary in an instant access cash account.

Recent figures from Credit Action showed that the total amount of personaldebt in the UK topped 1.3 trillion by the end of April with UK consumers borrowing more and saving less in the first quarter of this year.

Consumers took out almost 15 billion pounds worth of secured and unsecured debt in the first three months of 2007, thats almost 100 million pounds more than in the previous three months.

The ratio between how much consumers are borrowing, not including mortgages, and how much they are saving has now climbed to 41 pence borrowed for every pound saved.

That compares to 35 pence in the previous quarter and an average of 36 pence for 2006.

Personal debt in the UK continues to rise for a number of reasons and all the conscientious effort being made on saving money is being undone by continued increasing usage of credit cards, loans and overdrafts.

Further research has also shown that only 49 per cent of people are saving enough for their later years and 24 per cent are not saving at all.

Women, the self-employed and people indebt are among those least likely to be on track for a comfortable retirement as Britons have amassed a record personal debt mountain of more than a trillion pounds after interest rates hit a 48-year low of 3.5 per cent in 2003.

As the cost of borrowing has started to climb again, there doesnt seem to be any relief or easy way out of debt, especially as most Britons see debt as a way of life. The best way to remain financially sound is to only enter in debt if it is absolutely necessary, not just for a holiday or that new car. We also need to go back to basics and start drawing up a savings plan and a budget to stick to in order to avoid unexpected costs or bills.

This article was written on the 27th June 2007.

This article does not represent financial advice as each persons individual requirements will be unique to their needs. If there is something in the article which you which to rely on then please check those details with any person from whom you purchase a term life policy at the time of purchase.