A total of £428 billion is owed to credit card firms, banks and other lenders, far above the previous peak of £286bn just before the financial crisis in 2008.
“The government is skating on thin ice by relying on household debt to drive growth. A strong economy needs people spending wages, not credit cards and loans.”
The report says the rise of the gig economy and zero-hours contracts are also contributory factors to household debt.
The sharp rise in the third quarter of last year means debt now accounts for 30.4% of a household’s income.
But the figures do include student loans and with tuition fees in 2008 being £3,000 a year compared with up to £9,250 now, this does account for some of the difference.
Outstanding mortgage debts are not included in the Trades Union Congress (TUC) report and another report published on Sunday shows the news for homeowners is slightly better.
Nearly half of home owners with a mortgage say they have been making overpayments on their home loan in recent months – potentially meaning they will be mortgage-free earlier than they had expected
Young home owners, many of whom may have decades of paying a mortgage off ahead of them, are particularly likely to have been making overpayments, the survey of home owners from Which? Mortgage Advisers has found.