British consumers are losing faith in the banks and other financial services firms they find on the high street, according to a recent study.

Since the start of the credit crunch, millions of UK consumers have seen their debt management problems worsen and people are generally becoming less trusting of their financial service providers.

In fact, research carried out on behalf of the Newcastle Building Society has suggested that one in ten Britons would now prefer to stash their money under their mattress than invest it in a bank account of any kind.

Furthermore, the study also established that only a quarter of consumers around the country now consider a bank account to be the safest place for their hard-earned money.

Last week, Citizens Advice urged British banks not to charge people who are struggling to become debt free when they enter an overdraft without prior permission.

Many of the UK’s most prominent money lenders are increasing the rates of interest they charge on their personal loans, it has been claimed.

According to a report from Moneyfacts, close to half of all the finance firms in the UK have changed the rates relating to their personal loans and in most cases the alteration was upward.

For many people, these changes have made it more difficult to become
debt free and some are mistaking the rates advertised by lenders as “typical” for the one being actually offered on all associated deals.

With this and other potential pitfalls in mind, Moneyfacts has urged credit consumers to be aware of what deals are on the market and to shop around for the best arrangement available.

Meanwhile, David Kuo from Fool.co.uk recently urged people with debt management problems around the country not to hide their difficulties and to seek help from appropriate sources.