25/01/2012 06:21 GMT | Updated 26/03/2012 06:12 BST

Families Refuse To Talk About Money As Household Debts Soar

The average family debt, excluding mortgages, has increased by 48% in just a year, a report has revealed.

The study, by insurance company Aviva, found that families have added £2,500 to their credit card and personal loan debts in the last 12 months as they struggle to cope with soaring bills and living costs.

Credit cards make up the highest amount of unsecured debt with the average family owing £2,314.

Although families have seen an average income rise of 7% in the last year, the increase is barely enough to cover rising bill costs. As a result the amount the average family manages to save has dropped by £1 since January 2011, to £22 a month.

Louise Colley, head of protection sales and marketing at Aviva said: "While average incomes have increased over the past year, the prices of essential goods and services have also increased, meaning families are struggling to keep up.

"Many appear to have acclimatised to this economic environment by shopping around and seeking to minimise their spending in certain areas. However, at the same time there are still a worrying number of families with insufficient savings or large debts."

The study also found that millions of Britons are putting their financial security at risk by refusing to talk about family money matters at home.

It was revealed that more than a quarter of Brits (27%) refuse to bring up the subject of their debts with relatives while almost a quarter (24%) would not discuss their finances at all with family.

Financial experts have warned that by refusing to talk bout the family budget, many are ignoring important issues such as what they would do if anything happened to the main earner in the family or how they would cope if their income were reduced for any reason.

It would seem financial security measures are low on the list of priorities for the average Brit's budget. Only 3% thought that a life insurance policy was worth the money, compared to 27% who felt a TV subscription was a good use of cash.

Colley warns: "No-one likes to dwell on poor health or mortality, but people are stopping themselves putting measures in place to protect their loved ones.

"Too many assume someone else will look after their families if they weren't there to provide for them, but the reality is very different. People need to ask themselves how they would pay for their accommodation, food and other costs of living should they suddenly lose an income.

"They could be putting the future family of their families at unnecessary risk. Many report feeling peace of mind when they take out life cover, so we'd urge families to overcome their taboos."

Below, Trisha Doyle, editor of AOL Money, offers her top five tips on how to manage your family finances...