The average Brit is in debt by £5,898, up 41% over the past year, analysis has revealed.
Collectively we now owe an incredible £196 billion – up from £139 billion this time last year – in unsecured debt, spread across credit cards, overdrafts, personal loans, store cards, or finance agreements.
Two-thirds of consumers (66%) admit they have some form of unsecured borrowing. Half of them said they owe money on a credit card, while nearly a quarter said they were in their overdraft.
The most indebted age group is made up of those aged between 18 and 34. They have seen their debts almost double within a year from £5,446 to a worrying £10,058, while those aged between 35 to 54 saw their debts increase from £4,139 to £5,211.
The research from MoneySuperMarket raises concern that the apparent improvement in the economy is being fuelled by unmanageable credit card spending and other forms of borrowing.
Only 36% of borrowers think they will be able to pay off their debts within a month, while 24% think they will clear their debts within a year and 14% believe they will still be in the red for the next two to five years.
Dan Plant, consumer expert at MoneySuperMarket, said: "This research begs the question whether the economic recovery being celebrated by politicians is simply based on a rapidly climbing debt time-bomb.
"Not only are personal debts up by 40% across the board - with under 35s worryingly seeing what they owe more than double in just a year – they are being paid off more slowly than a year ago.
"This suggests the British public may be robbing Peter to pay Paul, with the increased consumer spending we've witnessed just a by-product of this – which would be hard to sustain. It was borrowing at excessive levels that was one of the contributing factors to the economic crisis so we must hope we aren't witnessing a repeat of mistakes of the past."
Meanwhile, the Institute of Financial Studies has reported average hourly wages in 2014 were 4.7% lower than they were in 2008, with those aged between 22 and 29 the worst affected with a 9% drop.