A new report by the Centre for Social Justice, supported by the Barrow Cadbury Trust, finds that personal debt in the UK is on the rise, and households are increasingly turning to short-term high-cost credit.

The report, Maxed Out: Serious Personal Debt in Britain, finds that personal debt in the UK is close to its all-time high, currently standing at £1.4 trillion. Average household debt is £54,000, almost twice the level it was decade ago.

In the poorest ten per cent of the country, indebted households have average debts that make up more than four times their annual income, whilst average repayment amount to nearly half their gross monthly income. The rising cost of domestic energy and other household bills has led to fears that more households will be pushed into personal debt.

Alongside increasing household debt, the report finds increasing use of short-term high-cost credit such as payday loans, pawnbrokers, rent-to-buy and doorstop lenders. The market for such sources of credit is now worth £4.8 billion a year. Payday loans have received a particularly marked increase in business, increasing from £900 million in 2008/09 to over £2 billion in 2011/12.

Maxed Out highlights vulnerable groups who are disproportionately affected by large amounts  surge of personal debt, such as the elderly, ex-offenders, single parents, the unemployed, people dependant on benefits, households with the lowest incomes and young people classed as Not in Education, Employment or Training (NEET). People in these groups often find themselves in cycles of debt due to low financial resilience and a lack of savings.

Read the full report here.