Research by the thinktank Resolution Foundation shows low-income households with an average of £15,800 at their disposal are walking an increasingly precarious financial tightrope.
It has found that 24per cent of low-wage households spend more than a quarter of their monthly income on debt twice the number from three years ago.
The study shows nearly a third of low-income households have high loan-to-value mortgages and are in negative equity, making them vulnerable to homelessness if they lose their job.
Sue Regan, chief executive of Resolution Foundation, said: ‘What’s important is not so much about when we get out of recession. It’s how sustainable the economy will be going forward if we increasingly see low-income households default on loans or lose their house.
‘If we don’t address this, it has got big economic ramifications for UK plc.’
The foundation is calling for high-street banks to involve themselves more in debt counselling when low-income households miss their first mortgage payment.