In figures released by the Alliance Trust Research Centre in its latest financial reality index, it was indicated that the standing of British households economic situation plummeted during the third quarter of this year. According to the research centre, the score tracking consumers fiscal standing continued the sharp decline that had first begun in 2007 reached 43.4 - the lowest point it has ever recorded since it began the research more than ten years ago. Such a figure, it was also revealed, is below the "critical" level of 100. Overall, declines in all three of the indices that consist of the organisations financial reality index were noted.

It was noted that a particularly dramatic fall occurred within the sub-index tracking British households budgets. This measure of the financial reality index was shown to have fallen from the 31.9 noted in the second quarter of this year to stand at 22.9 between August and October. Such a figure, the Alliance Trust Research Centre reveals, is an all-time low and is a continuation of the index's habit of being "consistently below" the critical 100 level that has been seen since 2002. Such a fall was reported to be driven a by fall in real earnings and inflation for basic goods reaching 15 per cent.

Meanwhile, the net wealth index was revealed to have fallen by some 34.6 points during the last three months to stand at 6.9. The decline was largely attributed to dropping property prices and equity values over the course of this year, which in turn have contributed to "drastically reducing" consumers net wealth. Meanwhile, the increasing unemployment rates and a slowdown in gross domestic product growth have resulted in the economic background index dropping from 122.6 to 114. This fall, it was pointed out, is the fourth consecutive quarterly decline.

As a result of such negative figures with regards to finances, it may be possible that consumers find they are increasingly struggling with keeping up with various monetary commitments. Such areas could well include personal loans, credit and store cards, household bills and mortgage repayments.

Commenting on the figures, Shona Dobbie, head of the Alliance Trust Research Centre, said: "Our financial reality index shows very clearly how greatly the drop in household wealth over the last quarter has hit consumers financial wellbeing. Sharp falls in house prices and share prices mean it is the household wealth index that performed worst last quarter, alongside the other two key factors that are families budgets and the economy. Poor figures across the board in all three categories mean that consumers are now facing the worst financial reality in the course of our 11-year study."

It was stated that since the index was launched the research centre has witnessed a "very close relationship between consumer spending and financial reality".

Ms Dobbie added that during the past three years this trend has been impacted upon by those Britons who have continued to "spend despite increasingly worsening financial circumstances". However, it was stated that people are now beginning to get a realistic grip on their finances and are starting the process of spending within their means once more.

For those consumers holding concerns about their ability to manage their money in the months to come applying for a cheap loan might prove to be of assistance. By selecting this kind of loan, borrowers could find they can meet various spending commitments - such as mortgage arrears and outstanding credit card bills - quickly, allowing them more disposable income at the end of each month. This could prove to be particularly useful after Axa recently revealed that some 20 million Britons have dipped into their savings schemes in order to meet various costs over the course of this year.