Millions face financial woe as debt levels soar

The average family now owes nearly £10,000, as hard-pressed Britons go deep into debt to survive the recession, a report warns.

The combination of near-stagnant wages and a rising cost of living has seen the average household debt – excluding mortgages – climb by three-fifths in the last year. And families are increasingly resorting to more expensive types of credit to make ends meet.

The Family Finances Report from insurer Aviva reveals that the average family now owes £2,266 on credit cards, £1,895 on loans and £1,650 on overdrafts.

They are also indebted to hire purchase companies (£749), doorstep lenders (£478), friends and family (£701), store cards (£913) and other informal lenders such as payday loan firms (£702). ..Independent