The study, which tracks the financial circumstances of different UK family types, showed that despite rising incomes and a greater commitment to saving every month, families are regularly turning to unsecured borrowing.

Typical household debt has increased by 38% since May 2012 (£9,314) and now stands at £12,834, the highest since this report series began in January 2011.

The biggest debts have been racked up through loans from friends and family, at an average of £2,011 per household, while credit cards add a further £2,006 and personal loans an additional £1,959.

Worryingly, five per cent of families now rely on payday loans and a further 3% use pawnbrokers to make ends meet.

The number of families making monthly debt repayments has fallen consistently in the last 12 months from 57% in August 2012 to 51% in January 2013 and just 45% in July 2013.

The report also found that the typical monthly net income in July 2013 fell just short of the highest figure ever recorded by the report series, which was £2,150 in April 2012.

With £2,108 at their disposal each month – 5% more than a year ago – the typical family has £1,260 more spending power over 12 months than they did in August 2012 when the typical monthly income was £2,003.

The extra income has had a beneficial effect on savings as people’s savings habits incorporate the rise in incomes.

The report highlighted that the typical family saves or invests £96 per month in July 2013, up by 20% from £80 in January to set a new record for the Family Finances Report.

However, the current financial downturn has also prompted many families to cut back on luxuries like satellite TV subscriptions and recreation.

Louise Colley, protection distribution director for Aviva, said: “Since we began our report series, we’ve seen a common thread of people juggling their finances to balance the family books. As money matters improve in one area, this is often offset in another – and this edition is no different. It’s great to see that families are saving more than ever, but slightly concerning that debt levels are continuing to climb.

“Building a savings pot is a fantastic step, but if debts are growing, families need to consider which is the more pressing need. We’d also urge people to take further steps and think about family protection to cover them against a sudden loss of income. Notably 55% of families say that unexpected expenses are one of their biggest financial fears so having this cover in place can provide invaluable peace of mind.”