Consumers who choose to save even when they still have debts to pay off could be loosing money in high credit charges, according to new research.

Financial protection company Axa Avenue found that for every £1 earned in savings, the UK's "saver-debtors" are being charged £5 in interest on loans, overdrafts and credit cards.

Some 12.2 million Britons, one in four, put away £2 billion in savings each year while stocking up £57 billion in unsecured loans.

Interest from the savings (£1.21 billion) barely makes a dent in the £6.51 billion charged in interest on £57.65 billion in unsecured debt.

"It is great that such a proportion of the population, more than 50 per cent, are saving on a regular basis," said Saran Allott-Davey from AXA Avenue.

However she added: "Those people who are saving money over and above clearing debts are paying unnecessarily high charges instead of redirecting savings for the short-term to be debt free."

Nearly 40 per cent of people say they continue to save while in debt because they feel more secure with some savings in the short term and 25 per cent say they do it out of habit.