UK households have average £54,000 debt as UK faces shocking £1.43 TRILLION personal debt crisis

Britain faces a debt timebomb as the cost of living continues to ratchet up, forcing more people to take loans they are struggling to repay.

The average family is now in debt to the tune of £54,000, which is double the level just a decade ago.

The Centre for Social Justice (CSJ), the think tank founded by Iain Duncan Smith, has warned that two of the flagship policies developed by him, the “bedroom tax” and universal credit, could force more people into debt and into situations where they risk losing their homes if unable to keep up loan repayments.

The CSJ also revealed that a shocking 5,000 people a year are already being made homeless every year as they are unable to keep up with rent or mortgage payments.

The study, Maxed Out, said that despite the country returning to economic growth, personal debt now amounts to £1.43 trillion, close to its record high.

The report warned that the UK’s poorest were hardest hit, and unsecured debt tripled in the last two decades to £160bn.

According to the CSJ, British households now owe the equivalent of 94% of the entire country’s economic output for 2012.

The report concluded: “Unless proactive steps are taken, problem debt in the UK will continue to grow unabated. The current levels of debt are worrying because they not only have severe financial implications, but also more wide-ranging impacts on people’s mental health, family stability, and ability to work. These are especially pronounced amongst low-income households and the vulnerable.”

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