Soaring debts weighing down middle-class families struggling on working-class pay

But the problem for millions is that they have only a working-class income.

The result is soaring levels of debt on credit cards and personal loans, according to research revealed today.

The phenomenon seems to echo the predicament of former BBC arts correspondent Rosie Millard, who ran up thousands of pounds of debt on credit cards trying to maintain her lifestyle.

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A report from the price comparison website Moneysupermarket.com identified around 2.7 million "social climbers" with an average personal debt of £13,000 excluding mortgages.

It said they are "deluded" and "living a middle-class fantasy" - without the salary to pay for it.

Many are using debt to finance the privileges of the middle and upper classes, such as private schools, second homes, cleaners and gardeners.

Others are enjoying several foreign holidays a year and dressing expensively despite their relatively modest earnings.

Researchers interviewed 2,000 people, asking them whether they think they are workingclass, middle- class or upper class.

They were then asked how much they earn, what they spend their money on and how much debt they have.

The survey names Cardiff as the hub of social climbing.

It says many in the Welsh capital believe they are middle-class, but do not earn enough money to pay the bills which come with their lifestyle.

By contrast, Liverpudlians think they are working-class, but actually have more disposable income than many in other cities.

Overall, it says there are 15 million middle-class "wannabes" who earn only as much as the working class, with some salaries on as low as £15,000.

The worry is that their expensive lifestyle could overwhelm them, particularly during the current credit crunch.

Many have been remortgaging their homes to finance their lavish lifestyles.

But the mortgage meltdown will put a stop to this, with lenders refusing to be as generous as they used to be.

Falling house prices also means that the equity in their homes is going down by the day.

This will be a particular worry for parents with children at private school who have locked themselves into one of the most expensive education systems in the world.

The average fees for a term at day school are £2,707 rising to £6,712 for boarding school, according to the Independent Schools Council.

To make matters worse, fees are rising at an inflation-busting pace of around six per cent a year, according to the latest figures.

Richard Mason, a director of Moneysupermarket.com, said: "With the credit crunch taking hold and the housing market faltering, it is worrying to see so many people are spending and borrowing beyond their means to keep up with the lifestyles of others.

Consumers need to take immediate stock of their household budgets to identify the pressure points and seek money-saving opportunities."

Official figures from the Bank of England shows how cashstrapped families have been going on a borrowing binge.

Credit-card debt in February nearly tripled to £350million and other types of borrowing, such as loans, soared to an all-time record of just over £2billion.

Sue Hayward, a personal finance expert, said: "If people want to get their hands on the luxuries the true middle class are enjoying then they need to save money when they can, and look at better ways of managing their money, not relying on credit cards to get them through."

Despite the rise in credit card debt, prudent shoppers are increasingly using cash to pay for goods, another survey suggests.

Cash is now used for 60 per cent of all sales, up from 54 per cent last year, said the British Retail Consortium.

In terms of value, cash is now used for 34 per cent of retail spending compared with 32 per cent a year ago.

BRC director general Stephen Robertson said: "Reports of the death of cash are premature.

"Cash is not only alive, it's thriving.

"Hard-up customers are increasingly reluctant to spend money they haven't actually got in their hands.

"While total retail spending continues to grow, there is a widening gap between the amount spent in cash and the amount spent using cards, suggesting customers want to keep tight control of their finances."

• Rosie Millard was living beyond her means thanks to credit cards - without having money to pay the bills.

The former BBC arts correspondent's spending ranged from a £4,000 flight to New York on Concorde to a £350 pair of Jimmy Choo shoes which she wore just twice.

Ms Millard also ran up a £1,000 phone bill while on a cruise and a £50,000 overspend when renovating the family home.

The resulting credit-card shuffle left her £40,000 in debt.

"Frankly, London was so full of people on City bonuses that I had forgotten I was not on one myself," said mother-of-four Miss Millard, who is married to a TV producer and quit the BBC to become a freelance writer.

"Bounced cheques? A daily occurrence.

Bank charges? I could have papered a room with the accompanying letters."

Her spending came to a "grinding halt" when she realised that it was not just the mortgage which she could not afford.

She was also struggling to find the money for her children's school meals.

She has since transformed her lifestyle and borrows books from libraries, never gets black cabs, throws away all mailorder catalogues and eats at home before going out to the cinema or theatre.