MORE than 1.5 million families are in extreme debt, fuelled by the “collapse” in the value of pay, says a new report.
Total unsecured debt, excluding mortgages, for UK households increased by £48 billion in the three years to 2015 to £353 billion, according to the TUC and Unison.
Their report, Britain In the Red, said 3.2 million households are in “problem debt”, paying out more than a quarter of income on unsecured debt repayments, while 1.6 million are in “extreme problem debt”, shelling out 40 per cent on repayments.
The problem is getting worse following a collapse in wages, which fell by more than 10 per cent between 2007 and 2015, the report warned.
TUC general secretary Frances O’Grady said: “Families can’t continue relying on credit cards and loans to get by, but with the average wage still worth £40 less than before the 2008 crash, lots of families have little choice.
“Higher wages must be at the heart of the government’s economic plan. We need a return to proper year-on-year pay rises, and a higher national minimum wage.
“We need public investment in major infrastructure projects to create more well-paid jobs.
“The government must also do more to help low-income families struggling with problem debt.”
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