Problem debt is costing the UK more than £8.3 billion a year, according to the debt support charity StepChange.
The charity says that the social costs of debt include loss of work productivity, employment prospects, home evictions, family breakdowns and welfare support.
The most substantial social costs to the UK are evictions, which cost an estimated £2.8 billion and the £2.3 billion lost as a result of lower job productivity.
Incomes not meeting costs
One of the main triggers of the debt crisis is that since the onset of the recession in 2008 income has consistently not risen as fast as household costs.
Commenting on this, David Mann, Head of Money at uSwitch, says: “Rising household bills against stagnant or falling incomes has put many consumers in a lose-lose situation.
“With the increase in the number of people with serious debt problems in this country, it’s clearly a tough time for those concerned about their jobs, homes and their ongoing ability to manage their debts.
“Many will no doubt be looking towards the Chancellor for more support in his autumn statement to help ease the burden .”
Taking control of problem debt
StepChange quantify problem debt as the additional welfare benefits, moving and eviction costs, lost productivity and demand for care, support and other state services that people rely on as a result of problems linked to their debt.
They believe that managing debt better could save the UK £3.1 billion.
David Mann says “Putting your head in the sand is not an option. Many have already taken a good look at their household budget to see where it’s possible to cut costs, but more can be done.
It’s crucial to make sure you aren’t paying over the odds for your existing debt and are getting the best rate on products like credits cards or loans.”
Your options for managing debt
Look at alternative credit options – If you think you are paying too much in interest for your loans and credit cards you could save yourself money by moving your debt onto balance transfer cards. Whilst this may cost you a fee, it could save you money in the long term.