Conservatives are to propose changes to the home credit market to reduce overcharging believed to total as much as £100 million a year.

The measures are part of a package designed to tackle a personal indebtedness crisis which has seen collective UK consumer debt reach £1.2 trillion - more than the country's total GDP.

Shadow chancellor George Osborne will unveil his blueprint for tackling personal indebtedness at a summit called by the Tories and bringing together banks, consumer representatives and debt counsellors.

Proposals include a seven-day "cooling off period" before consumers can use new store cards, as well as measures to stem the growth in Individual Voluntary Agreements (IVAs), which are increasingly used by private individuals to escape debt.

The Tories also want all 11 to 18-year-olds to have compulsory financial management lessons in school to make them better able to handle their finances when they enter adult life.

The summit comes amid growing concern over the level of personal debt in the UK, which is growing by about £1 million every four minutes. The average household pays more than £3,000 a year in interest on debts.

At the summit, Mr Osborne is expected to say: "For the Conservative Party, tackling personal indebtedness and financial exclusion is an issue of social responsibility. We need government, organisations and individuals to work together.

"It's increasingly clear that Gordon Brown hasn't done enough. Insolvencies are up, bankruptcies are up, and the numbers of people struggling to cope are up.

"This isn't just a problem for the people caught up in rising debts. It's a potential problem for everyone. An economy built on borrowed money is an economy built on borrowed time."

Under Mr Osborne's proposals, home credit companies - which offer small "doorstep loans" at three-figure interest rates - would be required to share data about customers' credit history as mainstream banks do, introducing more competition into a market worth up to £3 billion a year.

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