Unpaid consumer debt has soared to nearly £60bn in the UK, according to new research, with debt collection agencies being increasingly used by the government departments to recover unpaid amounts.
The report, published by the Credit Services Association (CSA), reveals that unpaid debt now tops £58bn, an increase of £6bn in the last six months. Nearly half of that debt has been passed to debt collection agencies (£31bn), with debt buyers taking on the remaining £27bn.
According to the CSA, 32m debts are awaiting collection from agencies, an increase of 4m in the past six months.
The report also reveals that though much of the debt has been transferred to agencies by high street landers, some of it has been passed on by government departments.
Utility companies and mobile phone service providers are also increasingly using agencies to recover cash.
CSA president Sara de Tute attributed the rapid rise on consumer debt to several factors, including the increasing use of agencies by the HMRC and the Treasury.
"The economic environment has undoubtedly become more difficult and so it is no surprise that debts are rising," she said.
"But there are also other reasons, including 'new' creditors within the private sector and parts of national government who no longer see an issue with outsourcing debt for collection to professional and highly regulated agencies capable of recovering monies vital to the public purse.
"The government has gone on record recently as reporting that overdue debts cost it between £7bn and £8bn, 95 per cent of which resides with the Department for Work and Pensions and HMRC, and part of this has now been passed to our members for collection."
On Wednesday, the Office for National Statistics disclosed a 0.2% fall in the UK's GDP for the first quarter, marking the return to recession for the UK economy.
The decline in gross domestic product (GDP) was driven by the biggest fall in construction output for three years, while the manufacturing sector failed to return to growth, the ONS said.