According to the TUC, frozen wages have meant more people need to borrow money to survive, with the number of households that are struggling with problem debt growing by a quarter between 2012 and 2014.

The TUC and Unison reported there were 2.5 million families who spent a minimum of 25 per cent of their gross monthly pay in order to service unsecured debts (problem debt). This rose to 3.2 million families by 2014.

The largest increases in debt were reported amongst low-income families, young people and those who are self-employed.

According to the report, 40 per cent of gross income was spent on non-housing debts by 1.6 million households. The majority of these earned an annual income of less than £30,000.

The proportion of 18 to 34 year olds spending more than 25 per cent of their earnings on debt repayments rose from 2 per cent to 10 per cent. According to the report, this was due to payday loans, credit cards and overdrafts, rather than student loans.

When the credit crunch hit, the payday loans market took off, and although rule changes have helped protect borrowers more, many still pay quite a bit of their income on repayments.

Frances O’Grady, of the TUC, said: “Rising household debt is not the sign of a healthy economy. People raiding their piggy banks and borrowing more than they can afford is what helped drive the last financial crash. We need a wages-led recovery that works for everyone, not another debt-fuelled bubble.”