A new report by the Institute of Fiscal Studies, carried out on behalf of the Joseph Rowntree Foundation, has found that one in five on low incomes have problem debts, compared with one in twenty on the top pay scales. It also found that on average the poorest fifth, are under pressure to spend £457 a month on paying back their debts out of an income of £1,012.

About a third of the poorest tenth of households are also likely to owe more than they have in savings, compared to only 10% of those in the top 10% income groups.

Key findings of the report, which can be found here, are:

• 50% of UK households between 2012-14 had some unsecured consumer credit debt, with over 10% having more than £10,000;
• Although those on lower incomes are less likely to hold any debt, where they do, they are more likely to hold more debt than they do savings;
• Those who held debt in 2012-14 are likely to have held it for a number of years;
• Whilst debt can be a sign that a household is struggling, it can also be an appropriate response to an income shock or anticipated drop in income.