Cash-strapped consumers are raiding their savings accounts and embarking on a borrowing spree as the credit crunch puts household disposable incomes under massive pressure.

Unsecured personal borrowing soared by £2.4 billion in February, the biggest monthly rise for more than five years, according to Bank of England figures released yesterday. A smaller rise of £900 million was recorded in January.

The much sharper than expected increase in unsecured borrowing - mainly through personal loans and overdrafts rather than on credit cards - startled the City.

The figures came in a worrying week with householders being hit by a series of inflation-busting increases in everything from council tax to utility bills. The higher living expenses, which come as the tax year ends, raised fears that consumers will be forced to borrow even more to meet their outgoings. There were also signs that householders were saving less and failing to put money aside to cover their retirements.

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Economists said that the jump in lending was explained by a dash for borrowed cash by consumers fearful that access to funds will dry up as the credit squeeze worsens.

“Together with the news that secured lending is getting harder and harder to come by, this could be a worrying sign of distress,” Danny Gabay, of Fathom, the economic con-sultancy, said.

Vicky Redwood, of Capital Economics, said: “Consumers are simply resorting to unsecured borrowing in their time of need. A similar pickup in consumer credit was seen in the United States slowdown in the middle of 2007. Either way, a rise in unsecured borrowing out of desperation would hardly be a positive development.”

The splurge in personal borrowing comes as high street lenders push up the cost of mortgages or withdraw from the market.

Two days ago First Direct, owned by HSBC, stopped lending to new mortgage customers after similar retrenchment by rivals led to five times its usual volume of applications. Experts are predicting that some of First Direct’s rivals will follow suit soon.

Britons are already facing their lowest level of disposable incomes for a decade after big planned rises in water bills, council tax, TV licences and road tax took effect this month. Customers of Scottish and Southern Energy are being hit by a 15 per cent increase in gas and electricity bills, as the group follows similar moves by rivals that look likely to push annual bills for dual-fuel customers past £1,000.

Council tax bills in England are going up by about 4 per cent a year, effective from April 1. The TV licence fee rises to just under £140 a year and green-oriented increases in road tax mean bills for drivers of the most heavily polluting cars will rise £100 a year.

The changes will add £203 a year to the average bill for a household that is a customer of Scottish and Southern.

Higher utility bills are adding to the pain of sharp rises in food costs and dearer petrol. Oil prices have pushed petrol up by 18 per cent.

On top of that, volatile stock markets are providing scant relief for savers and investors, who are increasingly sitting on any spare cash they have to ensure that they can meet their mortgage payments.

With two days to go before the end of the individual savings account (Isa) season, the booming market for the usually popular funds is threatening to fall off as consumers cash out in droves. Before the end of the tax year on Saturday, Isa sales are predicted to record their lowest annual figure since they were introduced almost ten years ago.

Evidence is mounting that Britain’s households are drawing on every resource to make sure they avoid defaulting on their mortgages, a problem that has sent America spiralling towards recession. According to a survey by the Prudential yesterday, Britons have almost halved their voluntary pension contributions in the past 12 months as a prosperous retirement becomes an unaffordable luxury for some.

Controversial tax changes including the removal of the 10 per cent low income band, are also likely to put pressure on low earners. The changes, due to come into effect on Sunday, will mean a low-paid worker on £10,000 a year will be £107 out of pocket.