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UK debt charity says demand for help hits record high

LONDON (Reuters) - The number of people seeking help from a leading British debt advice service hit a record high last year, reflecting a surge in borrowing by consumers and the financial strains on younger workers, the charity said on Tuesday.

Last year 600,000 people sought advice from StepChange for debt problems, up 9 percent from 2015.

StepChange also said the average amount of debt owed by its clients rose for the first time since the global financial crisis.

The average unsecured debt owed by people using the charity increased to 14,251 pounds last year from 13,900 pounds in 2015, the first rise in eight years.

British households have borrowed more while wage growth remains weaker than before the financial crisis.

Borrowing by consumers is growing at an annual pace of around 10 percent, something the Bank of England says it is watching closely.

StepChange said younger people were increasingly struggling. Many found their rent was rising by more than their pay from often insecure jobs.

The rise in debt levels was sharpest among clients aged under 25 who saw their average debt level increase by 13 percent to 5,812 pounds. Clients aged under 40 represented 60 percent of the charity's clients, up from 52 percent five years ago.

StepChange called on the government to introduce a "breathing space" scheme for struggling borrowers in England and Wales whose interest and charges would be frozen for up to 12 months, mirroring a scheme already in place in Scotland.

(Reporting by William Schomberg, editing by David Milliken)