Indebted families are living with credit card bills, loans and overdraft debts which typically equal nearly half of their yearly income, research from Aviva found.
The insurer said that 52 per cent of UK families have unsecured debts, including loans, credit cards and overdrafts, which amount to £10,604 on average.
This debt figure is just under half the annual household income of £23,796, Aviva’s Family Finances Report said.
Families are putting aside around £19 a month after having their budgets squeezed by soaring bills and stagnating wages.
Aviva said typical monthly incomes have risen by £46 since January, but energy bills, transport costs and food bills have soared, sending spending on non-essentials plummeting.
A quarter of families are spending nothing on holidays and more than half (52 per cent) have no budget for children’s activities.
Paul Goodwin, director of workplace savings at Aviva, said: “Incomes have only risen by £46 since January so to make ends meet, we have found that UK families are cutting out luxuries, economising on spending and reducing the typical amount they save.”
The report also found that almost a third of families (31 per cent) are propping up relatives and friends with loans and gifts, typically paying out £442 a year.
Mothers, fathers and grown-up children were the most common recipients of this type of help, but 3 per cent of people said they also helped their friends out with cash.