Poorer people are “bearing the brunt of a storm” during which average household debt has risen to £54,000 – nearly double what it was a decade ago, the report by the Centre for Social Justice thinktank warns.

The report, entitled Maxed Out, found that almost half of households in the lowest income decile spent more than a quarter of their income on debt repayments in 2011. More than 5,000 people are being made homeless every year as a result of mortgage or rent debts.

Christian Guy, director of the thinktank established in opposition by the work and pensions secretary, Iain Duncan Smith, said: “Problem debt can have a corrosive impact on people and families. Our report shows how it can wreak havoc on mental health, relationships and wellbeing. Across the UK people are up until the early hours worrying about their finances and bills.”

The report, written by the former Labour work and pensions minister Chris Pond, found that:

• Personal debt in the UK, including mortgage lending, stands at £1.4tn – an average of £54,000 per household compared with £29,000 a decade ago.

• Consumer debt had trebled since 1993 and now stands at £158bn;

• More than 8m households have no savings, including half of low-income households;

• Outstanding debt on credit cards has almost trebled since 1998 to reach £55.6bn;

• There were 300,000 arrears on mortgage in 2012 – with 34,000 homes repossessed. This is a reduction of 30% from the peak of the recession but a 60% overall increase since 2006.

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