'I am frightened by how much I owe'

Although she is now 29, Ailsa Macfarlane still carries a hefty financial burden from her long-gone student days: debts of nearly pounds 30,000.

On top of undergraduate debts of around pounds 9,000, Ailsa, who lives in south London, ran up pounds 7,000 on a credit card, pounds 1,500 on an overdraft and took out a pounds 10,000 bank loan.

'I'm deeply in debt: as a student in London, the capital was very expensive to live in.'

But Ailsa, who earns pounds 25,000 a year as a business account manager, is trying to get a grip on her finances. Three months, ago, she consolidated her credit card debt, overdraft and bank loan into one larger pounds 19,500 loan with Lloyds TSB " repayable over eight years with an annual percentage rate (APR) of 7.5.

Ailsa pays back pounds 250 a month on her bank loan. Add to this the pounds 180 a month for her student loans, and she spends pounds 430 a month servicing her debt.

'I am frightened by how much money I owe to Lloyds TSB,' she says. 'Over eight years, I know I have to pay pounds 7,000 in interest alone " but this loan seems to be the only way I can manage my debts and still be able to afford to live and pay my bills each month.'

Her debt mountain has made it impossible for Ailsa to build up any savings or make any investments. She has no pension savings either, and her employer, a small firm, doesn't offer an occupational scheme.