A report produced by the University of Birmingham on the distribution of wealth in the UK has called for concerted action to encourage saving in a bid to stave off the scourge of problem debt.

The report, published today, calls for a series of measures to encourage saving – even among those on the lowest incomes – and for a new not-for-profit body to represent the interests of savers.

The University of Birmingham Policy Commission report, entitled: Sharing our good fortune: understanding and responding to wealth inequality urges policy makers to do more to help people avoid problem debt, will be launched in Westminster tonight.

It states: “In terms of debt prevention, increased levels of saving would clearly help to avoid the need to borrow. Saving is clearly difficult for those on very low incomes but if people can afford to repay a loan, this suggests that they could afford to save.”

Among the recommendations are automatic enrolment into a savings account for people starting a new job and a match-saving scheme devised to encourage and reward savings by those on low incomes

Further recommendations include fresh incentives to increase the amount saved in occupational pensions for those on low and middle incomes, increased funding for debt advice and credit unions and the creation of a new not-for-profit organisation to represent the interests of savers

The Rt Revd David Urquhart , Bishop of Birmingham and chairman of the commission, said: “The debt problem in this country is spiraling out of control. Pay day lenders are preying on some of the most vulnerable in society.

"The less well off used to save hard for things they wanted but today’s society puts everything on credit and serious problems occur when those loans have to be repaid. We need to persuade more people to save, even if it’s very small amounts and policy makers need to grasp the nettle to reverse the escalating debt crisis.”

Professor Karen Rowlingson, lead academic on the commission, said: “The gap between rich and poor in Britain today is much greater than people think it is, or want it to be. This policy commission calls for a fresh discussion about how to help people reduce debt and build some savings.”

Commission member Dr Paul Cox added that an organisation to serve savers’ interests could be funded through a flat rate £1 charge collected on all UK investment trades over £10,000.