UK piggy bank
Total UK household debt has soared to £349bn with the average home owing almost £13,000 before their mortgage

The average UK household owes almost £13,000 ($15,980) as flatlining wages and mounting debt begin to bite, the Trade Unions Congress (TUC) has warned.

The trade union federation claims families are forced to borrow more because of sluggish wage growth and revealed unsecured debt as a percentage of household income rose to 27.4%, the highest figure for eight years.

The TUC used Office for National Statistics (ONS) figures that showed total unsecured debt in the three months to September 2016 hit an eye-watering £349bn. By dividing that amount, which was boosted by student debt, by the number of UK households it worked out each household is £12,887 in the red, before mortgages are taken into account.

TUC general secretary Frances O'Grady said workers' wages were worth less now than they were nine years ago.

"These increases in household debt are a warning that families are struggling to get by on their pay alone. Unless the government does more for working people, they could end the new year poorer than they start it.

"Employment may have risen, but wages are still worth less today than nine years ago. The government is relying on debt-fuelled consumer spending to support the economy, with investment and trade in the doldrums since the financial crisis."

The bleak numbers come after data showed the UK economy finished 2016 strongly and grew at its fastest pace for 18 months. The Markit Purchasing Managers Index predicts the economy probably grew 0.5% in the final three months of 2016 – the same as in the final quarter of 2015.

"The UK economy continues to defy widely held expectations of a Brexit-driven slowdown," IHS Markit's chief business economist, Chris Williamson, said. However, economists predict the shrinking value of the pound and rising inflation will cause a slowdown in 2017.