Almost 60% of the nation is currently in debt and the average amount owed is expected to rise by 11% to £3,834 over the coming year.
The worsening cost of living crisis is eating away at people’s savings, while the average Briton is expected to lose almost £1,500 in disposable income a year.
New research from VoucherCodes has also shown savings pots are set to fall by more than £1,300 a year as the price of food, fuel and rent continues to soar.
According to the figures, 58% of the country is currently in debt, and the income bracket with the biggest expected increase in debt is those earning between £59,000 and £59,999 at 14.2%, just over £5,000 £.
Those in the lowest income bracket of £15,000 to £19,999 can expect the highest average debt as a proportion of income at almost 20%.
It also suggests that as debt rises for millions of Britons, the average amount of lost disposable income will be £124 a month, which equates to almost £1,500 a year.
Many Britons are therefore cutting back on items once considered luxuries such as streaming service subscriptions, takeaways and splashing cash at restaurants.
“The changes brought about by the crisis are having a profound impact on consumer spending and already perceptions of what constitutes a luxury item are changing,” said Anita Naik, savings expert at VoucherCodes.co.uk.
“Items that were previously taken for granted are among the many items that Britons now consider extravagant expense.”