Millions of Britons are about to realise that their take-home pay is not sufficient to cover their debts, a new report has claimed.

A study by accountancy firm KPMG has revealed more than 20 per cent of debt-ridden adults already find it hard to manage their money, the Daily Telegraph reports.

It discovered that 35 per cent have concerns that they will find their repayments even more difficult to meet in a year.

The research was undertaken on behalf of ITV’s new documentary Repossession, Repossession, Repossession.

Steve Treharne, a partner at KPMG specialising in insolvency, told the newspaper many people will find 2008 a financially unsettling year.

"A lot of people have been living the life of Riley on credit … This is all going to have to stop. It is unsustainable," he asserted.

Many people will already have been worrying about the cost of servicing their debt obligations as the rising cost of fuel and food squeezes their household income.

One option for struggling debtors is an individual voluntary arrangement, usually called an IVA.

These allow borrowers to repay an affordable sum for a fixed period, at the end of which any remaining debt is written off.