A nation drowning in debt.

UK households are increasingly ‘living beyond their means’ as outgoings surpass income for the first time in thirty years according to figures produced by the Office for National Statistics (ONS).

This comes at the same time as a report by the Treasury select committee reveals the worrying state of household finances, with a growing number lacking a ‘rainy day' fund from which to meet unexpected expenses.

On average UK households spent £900 more than they received in 2017, amounting to £25billion, a quarter of the cost of running the NHS. The last time outgoings surpassed earnings was in 1988 then the shortfall was £0.3billion.

Chair of the Treasury select committee Nicky Morgan said “many households are facing challenges that are putting pressure on the health and sustainability of their finances “.

The pressures placed on family budgets by the rising cost of food and housing have contributed to households across the country increasingly relying on borrowing to make ends meet. In 2017 borrowing reached £80billion, with savings falling to £37billion.

The ONS figures show that the poorest 10% of households spend two and a half times their disposable income on basic living expenses, the richest 10% spend less than half theirs on the same outgoings.

Although praising the FCA for putting a cap on the interest rates charged by payday lenders the committee used their report to criticize government attempts to encourage saving.

Policies like giving tax relief on pensions and ISA's, they claim, do not provide a big enough incentive for people to save. They suggest using cash bonuses and direct matching schemes instead.

Responding to the ONS figures shadow chancellor John McDonnell, speaking to the Morning Star, said they were a “stark example of how brutal Tory pay restraint and austerity had led to living costs outstripping earnings for families “.

Also speaking to the Morning Star Phil Andrew, chief executive of debt charity Step change said it was “unfortunate “that the ONS talked about people ‘living beyond their means’, since it implied people had a choice “when too many people do not”.

He added that “the reality is that too many households, here in Britain, in 2018, simply cannot make ends meet, however hard they try”.

Tom Selby, a research analyst at financial adviser AJ Bell told the Guardian the ONS figures presented the government with a major challenge as they try to “build financial resilience in the UK”.

The burden of debt they carry is limiting the ability of families across the country to plan for the future and their ability to withstand any potential shocks such as a lengthy Brexit induced recession.

Attempts by the government to make it easier and more attractive to save have, so far, underperformed, creating a situation where, as Tom Selby told the Guardian “for people having to borrow to make ends meet, saving for the future might feel like a luxury they simply cannot afford”.