Job losses and falling incomes look set to leave a rising number of households unable to repay their debts, a charity has warned.
According to the Consumer Credit Counselling Service (CCCS), many families were struggling in the face of falling or stagnating incomes and rising living costs.
It said for those with high levels of debt the situation was often unsustainable, with people facing big gaps between their monthly income and their outgoings.
The charity warned that families were the most vulnerable, with people who have two children being left with an average of just £62 per month to repay debts after essential outgoings.
Families that had three or more children needed an additional £45 a month just to cover living costs.
Lord Stevenson, Chairman of the CCCS, said: "The picture is undoubtedly bleak and it seems likely that many more families, including better-off ones, will be increasingly prone to over-indebtedness in the months ahead.”
In the worst cases people risk losing their job completely.
"It is also not a uniform picture across the country: public sector cuts in terms of jobs, spending and benefits will weigh disproportionately on certain groups of people,” he said.
Around 55 per cent of people who contacted the group for help last year received some type of benefit or tax credit, with these accounting for around a third of their household income.
The group, which analysed data from the 418,000 people it helped with debt problems last year, said 55 per cent of people cited the loss of their job or a fall in income as the reason they were unable to keep up repayments, a third of whom did not have enough money to cover basic living costs, let alone pay their debts.
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