By Claire West

Consumers are walking a tightrope with their finances, according to new research by uSwitch.com, the independent price comparison and switching service. Nearly a quarter (23%) just ‘break even' at the end of every month, leaving no contingency money for unforeseen emergencies such as a rise in bills, a boiler breakdown or a hike in fares.

A further 7% of consumers actually spend more than they earn, relying on overdrafts (37%), savings (28%) and credit cards (23%) to plug the gap. Overall, more than a third of Brits (39%) are struggling to make ends meet and have been forced to cut back on everyday essentials. Almost three in ten (28%) are spending less on food and a fifth (19%) have reduced their fuel consumption. Things were set to get better in 2012 - but 14% of consumers say that they are worse off now than they were 12 months ago.

Even for the lucky few (26%) who have managed to avoid cutting back this year, there is little to celebrate. Rising food costs, energy price hikes and fuel and rail fare hikes just around the corner January mean that very few are likely to escape the squeeze. In fact, three-quarters (75%) of consumers are entering the festive season worried about their financial situation.

For the one in three (34%) who have suffered a pay freeze over the last 12 months, and the further 8% who have actually had their pay cut, balancing the books has been even tougher this year.

To make ends meet, consumers have borrowed an average of £1,950 on top of their mortgages - but only a quarter (26%) have managed to pay it all back[3]. As well as cutting back on essentials, in a bid to boost finances, more than a fifth (22%) have started taking a packed lunch to work, 16% have resorted to flogging their belongings in return for hard cash, while 13% have taken on extra work to boost their income.