As the amount of consumer credit owed by UK households continues to grow, it is time to pause and think about what is driving our borrowing needs and what is healthy and sustainable.

Bank of England statistics show UK households have taken on nearly £60 billion in additional consumer credit debt since early 2013, and the market continues to grow at about 9% per year . At the same time, the Office of National Statistics reported data showing UK households had in aggregate seen their outgoings surpass their incomes for the first time in nearly 30 years . The implication is that borrowing is making up the difference. Importantly the income-expenditure gap is heavily concentrated among lower income households.

Together, these two stories reveal some underlying truths about the current nature of our borrowing needs. Firstly, when it comes to borrowing there is no ‘our’, no common and collective experience of what credit means to all households and how we use it.

On one hand, there is the classic use of credit as utility enhancing consumption smoothing – paying for big lumpy things in manageable instalments over time. This enhances financial wellbeing, but only for those borrowers who have the secure disposable income to comfortably meet repayments.

Then there are the nine million people who have to use credit to pay for essential expenditure. This includes over one million people using high cost credit to make ends meet. When borrowing becomes a safety net for meeting basic needs the outcomes are often bad. Not financial wellbeing, but the corrosive hardship and harm of problem debt.

This new research from Neyber highlights that there is a significant group of employees who are living and working under this shadow of financial difficulty. At StepChange Debt Charity, around six in ten of our clients are in households where someone is working. Our own research highlights how the constant pressure of worrying about money can reduce performance and attendance at work. In some cases debt related physical and mental health problems drive people out of work.

This should remind us that problem debt is not just a personal finance issue but a cause of wider social harm with costs that fall on us all. Only a co-ordinated support and prevention strategy will make a lasting difference.