Years of increased borrowing, rising living costs and struggling to save has forced many families into a debt trap that is proving very difficult to escape.
Problem debt can have a corrosive impact on people and families. Our report shows how it can wreak havoc on mental health, relationships and wellbeing.
Across the UK people are up until the early hours worrying about their finances and bills.
Some of the poorest people in Britain are cut off from mainstream banking and have no choice now but to turn to loan sharks and high-cost lenders.
Household debt has almost doubled in the last decade as more families struggle to pay their rent or mortgage, the Centre for Social Justice has warned.
The think tank - founded by the Work and Pensions Secretary Iain Duncan Smith - said British households now owe an average of £54,000, an increase from £29,000 a decade ago.
The study also found households in the poorest 10% of the country have average debts more than four times their annual income, with their average debt repayments amounting to nearly half their gross monthly income.
Personal debt in Britain has reached £1.4 trillion, according to a report by an influential think tank.
According to a study by the Centre for Social Justice, around 3.9 million British families do not have enough savings to cover their rent or mortgage for more than a month.
More than 26,000 UK households were accepted by councils as homeless in the last five years because of rent and mortgage arrears, including more than 5,000 last year, the think-tank said.
Its report, Maxed Out, said poor people were bearing the brunt of a "perfect storm" of rising living costs, falling real wages, low savings and expensive credit that has seen unsecured consumer debt almost triple in the last 20 years, reaching nearly £160 billion.
Public sector net borrowing fell to £15.1 billion in March, according to the latest figures from the Office for National Statistics.
This was down £1.6 billion from March 2012 when net borrowing stood at £16.7 billion.
If you have borrowed from an unlicensed lender or 'loan shark' you have not broken the law, they have. Here are some sources of advice:
- 24/7 confidential advice - 0300 555 2222
- Text ‘loan shark and your message’ to 60003
- Email email@example.com
- Send a Facebook message to www.facebook.com/stoploansharks
Unlicensed lenders - often called 'loan sharks' - operate illegal money lending businesses without a licence from the Office of Fair Trading. Here are some clues for identifying them:
- Rarely offers paperwork to keep borrowers unsure of how much they owe
- Charge extortionate rates of interest (rates of 131,000% APR have been seen)
- Add additional amounts to the debt so borrowers struggle to repay
- Take items such as passports of bank cards as security
- Employ extreme methods to reclaim their debts, including violence and intimidation
Source: England Illegal Money Lending Team
President Barack Obama has he would be willing to take over authority for raising the borrowing limit, saying the the US is "not a deadbeat nation".
Obama was asked at a news conference about differences he is having with congressional Republicans over raising the $16.4 trillion debt ceiling that the country is expected to hit as soon as the middle of next month.
"This is about paying your bills," he said. "We've got to stop lurching from crisis to crisis to crisis."