LONDON (Reuters) – A growing number of consumers are over-indebted and ill-equipped to cope with an economic shock, Britain’s largest debt charity, StepChange, has warned after a record number of calls to its national helpline in the first half of this year.

More than 331,000 people contacted StepChange for help with problem debts in the first six months of 2019, and the charity found those they advised were saddled with more unsecured debts.

StepChange said its findings showed an increasing number of British households were struggling to cope financially and “living on a knife edge”, with the charity seeing red flags “across the board”.

Of the 190,484 people who received full debt advice during the period, the average level of unsecured debt was 13,799 pounds, up 2% on the prior year and 6% up on 2016, the charity said in a report published on Wednesday.

Around a third of new clients’ outgoings were more than their incomes, the charity added, with problem debt most commonly caused by unexpected life events such as a reduction in income, injury or illness, or redundancy.

“These statistics provide a sobering assessment of the scale of problem debt in this country”, StepChange Chief Executive Phil Andrew said.

“Clearly more and more households are struggling to hang on and are ill-equipped to deal with any economic shocks the future may hold”.

The charity’s findings come against an uncertain outlook for Britain’s economy, with the country bracing for potential economic fallout in the event of a chaotic Brexit.

Analysts and regulators predict a disorderly Brexit would likely lead to a spike in bad loans, but the political turmoil has yet to make a significant dent on lenders’ books, with growing wages and low unemployment helping keep impairments to a minimum.

Britain’s economy shrank in the second quarter of 2019, although concerns of a recession were eased somewhat by stronger than expected output in July.

Commenting on StepChange’s data, Colin Jackson, banking analyst at Goodbody, said: “We would expect an increase in impairments if a no-deal Brexit led to a slowdown in growth and an increase in unemployment”.

“An increase in complaints could be a prelude to an increase in impairments more widely”, he added.

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