The number of people struggling to meet bills and pay off loans has risen by over 3mln or 39.7% over the past year, according to research by the Financial Conduct Authority (FCA).
This has increased the total to 10.9mln people who are currently having problems paying their monthly obligations as household budgets are squeezed by the soaring cost of living.
The financial regulator released the new data as it urged the public to get help from their lenders if they are struggling to keep up with payments.
In the past six months, 5.6mln adults, or around 11% of the UK population have missed bills or loan payments on at least three occasions, up from 4.2mln a year earlier, the FCA found in its latest research.
Around half of UK adults told the regulator they felt more anxious or stressed due to the rising cost of living than six months earlier.
In October, research from the regulator found 60% of adults were finding it a “heavy burden” or “somewhat of a burden” keeping up with bills.
The FCA has been forced to punish more than 3,000 lenders that it felt were not supporting their customers properly, with some told to make changes to the way they treat customers.
It has also told banks they must treat small business customers fairly when collecting and recovering debts, after finding that some banks were arranging payment plans which were unaffordable.