CONSUMER campaigners have warned that £1.5 million more families are feeling the pinch than a year ago.

A new report by Which? says one in three British families is now feeling financially squeezed, although a growing proportion believes things will improve in the next year.

The Which? Consumer Insight Tracker found 34% of households, around nine million, are feeling the strain, up from 7.5 million in July last year.

However, 24% believe the economy is going to get better, up from 16% last year and 66% describe the economy as poor, down from 76%.

Despite increased consumer confidence, only one-quarter of people expect their own financial situation to improve and three in 10 people continue to cut back on essentials.

The tracker revealed that, on average each month in the last 12 months, 7.8 million had to borrow money from family and friends, 1.3 million took out a credit or store card and one million took out a payday loan.

Citzens Advice Scotland (CAS) said the report revealed "worryingly high numbers" of people getting into debt.

Responding to the report, CAS chief executive Margaret Lynch said welfare reform had cut the incomes of those struggling the most.

"So many households are finding it really tough just to get by. The equation is simple: the cost of living is going up all the time, yet people's household incomes are being cut."

The Scottish service is also seeing 100 cases a month where people are in crisis due to a payday loan.

Which? executive director Richard Lloyd said: "The Government must do more to keep spiralling housing, food and energy prices in check."