A union group has warned that families could be set to face a 'debt timebomb' in 2024 amid further financial difficulties from the cost of living crisis.

The Trades Union Congress (TUC) said its analysis showed that unsecured debt is set to increase by £1,400 in real terms on average, per household.

This includes loans, credit cards and purchase hire agreements.

It added that unsecured debt per household is on course to reach a record level of £17,200 by 2026, which would be above the previous high of £16,800 set in 2007.

Dorset Echo: Unsecured debt will increase in real terms on average by 1,400 next year the TUC has saidUnsecured debt will increase in real terms on average by 1,400 next year the TUC has said (Image: PA)

They calculate their figures using a mix of Office for National Statistics data for existing figures and Office for Budget Responsibility predictions for the future, Sky News reports.

TUC general secretary Paul Nowak has described it as a "debt timebomb" and said that working people have been left “brutally exposed” to rising costs after years of pay stagnation.

Speaking to Sky News, Torsten Bell, the head of the Resolution Foundation think tank, has warned that next year will be "messy." 

He notes that despite inflation falling faster than expected, higher interest rates mean around 1.5 million mortgage holders will have to cough up an extra £1,800 a year.

Renters will also see prices go up - with only "outright owners" of their homes seeing "strong living standards growth".

Britain 'cannot afford the Tories' TUC says

Mr Nowak will warn that Britain “cannot afford the Tories” in his annual New Year message.

He will say: “Every month the Tories stay in office the more families will be pushed into debt.

“This party of out-of-touch millionaires is more focused on clinging to power than on growing our economy and getting living standards rising again.

“If something doesn’t change, real wages won’t recover to their 2008 levels until 2028.

“These 13 years of economic stagnation have left working people brutally exposed to the cost-of-living crisis.”