7% spend half of earnings on unsecured debt

This figure increases to 1 in 9 (11%) for 25-34 year olds, and again to 1 in 8 (12%) for those living in the North East.

Increasingly, a third of borrowers (34%) say that their repayments account for between 21% and 49% of their pay.

The report found that 65% of UK adults have unsecured borrowing, with borrowers spending around 20% of their take home pay on debt repayments each month.

Conversely 71% of people over 55 say that their repayments account for less than 20% of their income (compared to the average of 59%) – although the proportion of this age group who pay over 50% is also 7%.

Ian Williams, spokesman for DAC, says:

“Clearly circumstances differ and a young person with no dependants and living at home may be able to sustain a higher proportion of their income going towards their unsecured borrowing.

“However, it is alarming to find that for 41% of borrowers their monthly commitments are 21% or more of their pay, and very concerning to find that for 7% of borrowers their repayments account for over half their income. Whatever their circumstances this is unlikely to be sustainable for very long.

”It is likely that many of these people can only survive by cutting back on essentials – perhaps switching off the heating, skipping meals or even getting behind with rent or mortgage payments. It’s really important to remember that – however high they are- unsecured debt repayments should be treated as less of a priority than key bills such as utilities, food and housing.”