1.9m UK households failed to make at least one mortgage, rent, loan, credit card or other bill payment over the last month.
With the UK heading into recession, mortgages and rent costs rising and the energy price guarantee becoming less generous from April, consumers will only face further financial pressures in 2023 leading to more defaults, it warned.
About 4m households are likely to face higher mortgage payments in 2023, with the average monthly mortgage payment rising to £1,000 (up from £750), the equivalent of about 17% of pre-tax income.
Earlier this month the Trades Union Congress said 2022 has seen the sharpest fall in real wages since 1977 and the second worst on record since 1945. Analysis of official statistics found that real wages fell by an average of £76 a month in 2022 as a result of pay not keeping pace with inflation.