Millions of families live on the edge to lend costs are spiraling out of control, fueled by wage cuts, the researchers warned.
The figures of the YOU KNOW this week showed that 1.6 million households are already “severely in debt” – a significant portion of their income going to pay off credit.
And activists warn that the level of financial worries is pushing many people to mental health problems as they fight to cope.
A second report shows that one in six adults – over eight million – owe money for things other than a mortgage.
He revealed that 3.2 million households have now plunged into “problem debt,” where a quarter of all their income is spent on interest and repaying credit.
The TUC revealed that total unsecured debt, including car loans and credit cards, stood at £ 353 billion in 2015, an increase of £ 48 billion in three years.
Frances O’Grady , General Secretary of the TUC, said: “Families cannot continue to depend on credit cards and loans to get by.
“But with an average salary still worth £ 40 [a week] less than before the 2008 crash, many families have little choice.
“Higher wages must be at the heart of the government’s economic plan.
“We need a return to year-over-year wage increases and a higher national minimum wage.”
The lack of wage growth means that millions more could be dragged into an ever-increasing spiral of debt.
David Rodger, chief executive of the Debt Advice Foundation charity, said: “As real wages continue to fall, the inevitable result is increased consumer borrowing – and debt repayment costs.
“Personal borrowing continued to rise, reaching all-time highs before the 2008 global crisis recession .
“If you are worried about debt, the best thing to do is to contact a nonprofit charity that will advise on debt that will examine all available options. “
Fears of a looming crisis have been echoed by the Money Advice Service, which has found more than three million families handing over at least a quarter of their income to meet their debts.
Funded by the industry regulator, FCA, the agency was created by the government to offer free advice on spending concerns.
Their breakdown by region revealed that Sandwell in the West Midlands is the household that owes the most – with nearly a quarter of people struggling to manage their repayments.
Experts warn that large families and single parents are among the most vulnerable groups.
And rising rents mean that tenants too are taking on more and more debt.
Sheila Wheeler, the agency’s UK debt advice director, said: “We are concerned about the high level of household debt across the country, particularly the number of people borrowing money. to cover their living expenses.
“Our latest research estimates that 8.2 million UK adults suffer from a debt problem – young adults, large families and single parents being significantly more at risk.
“We know that free debt counseling works – but currently only one in five struggling people seek help.
“We fully support TUC’s call to help low-income families access debt restructuring and insolvency assistance.”
She added that it was important for people to have the time and support to get their finances back on track “without pressure from their creditors”.
The full regional breakdown of debt shows people are struggling across the country – the Scots being the least likely to borrow to get out of trouble.
The Financial Advisory Service / CACI)
In addition to the neglected cities of the North, three London boroughs feature in the top ten.
And vulnerable areas of South Wales and Northern Ireland are also included.
The lowest borrowing rate is in East Renfrewshire in Scotland, where only 10 percent of people are in debt.
The report, which was released by the Money Advice Service along with marketing firm CACI, used a series of criteria to piece together an overall picture of UK debt.
They found that 29% of people living in social housing depend on loans, as well as 21% of those who rent from a private landlord.
The Financial Advisory Service / CACI)
And a quarter of all families with three or more children are in debt.
Not surprisingly, income has been a big factor – those earning less than £ 10,000 are more likely to get by with loans and credit cards.
People aged 25 to 34 were four times more likely to be in debt than those over 65.
Peter Tutton, Policy Officer at StepChange Charitable Debt Advisory , said that extreme debt is triggered by income compression of people who manage with low to middle income.
He said: “Then they’re faced with some kind of financial shock that pushes them to the limit – maybe then they use credit cards, overdrafts and payday loans to try to manage and make up. gaps.
“This pressure is getting worse and worse. People are stressed – half of our clients say they have been treated in hospital for physical and mental health issues related to debt.
“People are stressed and sick, and some of them have to give up their jobs because they can’t work.
“That’s a lot of people who are unemployed in debt.
“In many cases their relationships break down and then they lose their home. There are all these huge and horrible hardships, all of them out of debt. “
£ 20,000 accumulated on credit cards
Software engineer Martin Langley racked up £ 20,000 on credit cards after losing his job in the economic crash.
For over eight years, he struggled to find work – and as he struggled to pay his bills, he turned to tantalizing credit offers for help.
It was only the cushion of equity from his house in southwest London, bought for £ 30,000 in 1983, that helped him survive.
Martin, 63, said: “In 2008 a lot of people lost their IT jobs – I was one of them. I made an agreement with one of the credit card companies.
“In the beginning, the rates were so low that they paid me to take their money out of them, while you factor in inflation. It didn’t affect me too much for a few years and then they got out of hand.
Eight years later, he’s on a stipend of £ 650 a month and still in debt – but his repayments are under control thanks to help from the Debt Advice Foundation.
Killing me seemed the only option
Lecturer James Martin has twice considered committing suicide after taking on more than £ 18,000 in debt.
REX / Shutterstock)
The former bank employee was sacked when the Royal Bank of Scotland was bailed out and jobs cut.
Then his roommate also lost his job and he found himself alone with the burden of paying the rent and the bills.
James, 29, said: ‘Every month I got £ 1,300 but the expense was £ 1,500. It was a hell of a year. I started using my overdraft, using credit cards, then I turned to payday loans.
“I would ask friends, family, anyone for money. At one point I owed my mother almost £ 2,000. Finally, he turned to food banks, then returned to his parents.
He spiraled into depression as debt collectors rang the bell, threatening to call relatives if he didn’t pay. And he got into the habit of staying in bed asleep to “avoid cravings.”
James, who now lives in Carlisle, said: “I haven’t even told my family about it. I tried to kill myself twice. It wasn’t a decision – you just think, “If I wasn’t here, nobody would care.” “
It wasn’t until James met workers at the StepChange charity that he was able to start meeting his debts, which now stand at £ 1,400. James said: “What helped was talking about it. You sit there and ask yourself, “How is that fair? “”