A charity has calculated that personal debt costs the UK £8.3 billion because of its impact on family life, work productivity and spending by government groups to help those in need.

Charity StepChange commissioned Baker Tilly to quantify the cost of debt to society in money terms. Breaking down the data, costs included:

- £443 million cost of small business employees losing their job

- £790 million cost of relationship breakdowns

- £960 million of mental health costs

- £5 million additional cost due to ‘desperation crime’

- £2.8 billion cost of losing a home or being evicted

- £2.3 billion lost due to falling work productivity

The research also found that transparent debt advice can counter some of the societal costs resulting from problem debt. StepChange said £3.1 billion could be saved if all 2.9 million people in problem debt took “effective advice”.

Debt advice has an important role to play, but wider action is needed by policy-makers to shore up family finances and ensure people can get the help and protection they need to prevent debt problems from worsening.