Job losses and falling incomes look set to leave rising numbers of households unable to repay their debts, a charity has warned.

The Consumer Credit Counselling Service (CCCS) said many families were struggling in the face of falling or stagnating incomes and rising living costs, while in the worst cases people risked losing their job completely.

It said for those with high levels of debt the situation was often unsustainable, with people facing big gaps between their monthly income and their outgoings.

The charity warned that families were the most vulnerable, with people who had two children having an average of just £62 a month left to repay debts after meeting all of their essential outgoings.

Families that had three or more children needed £45 a month more than they had coming in just to cover their living costs.

The group said the situation was set to get worse from the start of the new tax year, when the threshold at which the 40% rate of income tax kicks in falls and changes to the tax credits system will be introduced.

Around 55% of people who contacted the group last year were in receipt of some type of benefit or tax credit, with these accounting for a third of their household income.

CCCS chairman Lord Stevenson said: "The picture is undoubtedly bleak and it seems likely that many more families, including better-off ones, will be increasingly prone to over-indebtedness in the months ahead."