A recent study found that 4.3 million people have debts equivalent of three months or more of their income.
The study by Citizens Advice, Debt Restricting People’s Life Chances, examines the relationship between high levels of personal debt and wider issues in people’s lives, as well as the link between debt and mental health problems.
It also shows private renters are nearly twice as likely as those with a mortgage to have excessive debt and twice as many young people, aged 20-29, have unmanageable debt compared to 30-39 year olds.
People with high levels of unsecured debt are said to be less likely to make key life decisions according to the study published today.
Following the Bank of England’s decision to cut interest rates to a record low of 0.25 percent last week, Citizens Advice are calling on creditors to pass on the cut and take the pressure of those in debt.
They have also called upon the new government to put tackling unmanageable personal debt front and centre of its social mobility strategy.
Gillian Guy, chief executive of Citizens Advice, said: “Helping people escape unmanageable debt is crucial to a fair economy.
“The new Prime Minister has rightly pledged to improve life chances for all – at the centre of this effort must be a commitment to support people get free from unmanageable debt so they can get on in life.”
The new Citizens Advice report comes a month after the Bank of England reported the fastest growth in lending since 2005 – with consumer credit growing by £1.8bn.