Online transactions are set to quadruple by 2020, accounting for 40 per cent of all retail spending, but there are growing concerns that consumers are failing to protect themselves from cyber criminals.

Online sales are set to reach £40 billion this year according to analysis by uSwitch.com, the comparison website. During the run up to Christmas, 27million shoppers will spend a record-breaking £14 billion online, making Britain the web-commerce capital of Europe.

However, many internet shoppers are unwittingly exposing themselves to fraudsters who target unsecured home networks to obtain sensitive information.

Get Safe Online, a government-backed initiative that has been running for three years, claims that 7.8 million people in the UK have insecure home wireless networks that anyone could use. It means that a fraudster can “piggyback” on your broadband, and in some cases, monitor your online activity.

A member of the Serious Organised Crime Agency (SOCA) demonstrated how this was possible at a GetSafe Online conference held this week.

SOCA said: "Criminals can use the network you are on to hijack your PC or laptop, meaning that they can see, steal, delete or even add files on your machine. They can do all of these things while you are using your PC without you even realising something is wrong."

There were also warnings about the safety of social networks such as Facebook and MySpace.

It is estimated that of the 10.8 million people registered to social networking sites in Britain, as many as a quarter had posted sensitive information, such as home addresses and telephone numbers on their profile pages.

Tony Neate, managing director of GetSafeOnline said: "Although some of these details may seem harmless, they actually provide rich pickings for criminals. Your date of birth and where you live is enough for someone to set up a credit card in your name.”

However, it is relatively easy to secure your network. You can for example, install security software from firms such as Symantec or register a “network key” that will allow access to your home network only through a password.

You could also protect yourself by installing a firewall such as ZoneAlarm, which can be downloaded for free.

Online transactions reached an all-time high of £4.2 billion in July this year - up from £2.34 billion in the same period last year.

While the benefits of shopping online are clear in terms of time and convenience, consumers can also reap the benefits financially. Each household in the UK can save about £500 a year by purchasing goods and services online, according to uSwitch.

Goods such as broadband, credit cards and energy are on average 21 per cent cheaper online than through traditional retailers. Travel and leisure activities are also on average 15 per cent cheaper if bought over the internet, while the smallest savings, about 13 per cent, are made when buying grocery items online.

The survey, by uSwitch, also revealed that for everyday items such as bread and milk, consumers are no better off buying online than on the high street.