WALES has recorded a 30 per cent increase in the number of people declaring personal bankruptcies in 2004, according to research conducted by Grant Thornton.

But nationally this figure was by no means exceptional, with Northern Ireland topping a league table with a 67 per cent increase, and London running second with a 52 per cent increase.

For the UK as a whole there were over 45,000 individual bankruptcies during 2004, a 27 per cent increase on 2003.

Grant Thornton believes the figures show a correlation with average credit card debt, which stands at 2,000 in Wales, 2,861 in London and 2,300 as a country-wide average.

Richard Hawes, a Cardiff-based partner with Grant Thornton, said: "Having broken the trillion pound mark, UK consumer debt is at an historical high, and now amounts to more than the whole external debt of Africa and South America combined.

"Contributing to this growing debt mountain is the fact that UK consumers have a heady total of 66.8 million credit cards at their fingertips - worryingly, this is five times the European average."

Grant Thornton said that although 80% of our borrowings are secured (mainly in mortgages on our homes) 168 billion of UK consumer debt is unsecured.

This is made up of over 100bn in personal loans, over 56bn on credit cards, over 3bn in store cards, 3.5bn in instalment credit and over 5bn in mail order credit.

"Looking ahead heightens our concerns. A possible fall in housing values could see the problem get worse as people's ability to remortgage, a practice often used to repay debts, will reduce.

"Even mild decreases in the value of housing could trigger an alarming rise in the number of UK insolvencies."