High levels of debt make people less likely to move house, apply for a new job or start a business, according to new research from Citizens Advice.

The study from the charity – which helps more than 350,000 people a year with debt problems – shows how arrears are holding people back and calls on the new government to put tackling unmanageable personal debt front and centre of its social mobility strategy.

Following the Bank of England’s decision last week to cut interest rates to a record low of 0.25%, Citizens Advice is also calling on creditors to pass on the cut and take the pressure of people in debt.

Citizens Advice finds that 4.3 million people (9%) have debts equivalent of three months or more of their income (on average £6,500) and that 45% say their debt makes them less likely to start a business, compared to 33% of the general population.

41% say their debt makes them less likely to study or retrain, compared to 27% of the general population, while 28% say their debt makes them less likely to change jobs (compared to 19% of the general population).

In addition, 34% say their debt makes them less likely to move to a new town or city, compared to 27% of the general population.

The new report from Citizens Advice finds that young people (aged 25-34) with high debt are 19% more likely than older people (aged 45-54) with debt to say they would not study or retrain.

It also shows private renters are nearly twice as likely as those with a mortgage to have excessive debt. The study also finds that twice as many young people (aged 20-29) have unmanageable debt compared to 30-39 year olds.

Gillian Guy, chief executive of Citizens Advice, said: “Helping people escape unmanageable debt is crucial to a fair economy. Being able to borrow money helps people make significant investments in their lives – such as getting on the housing ladder or going to university. But when debt becomes excessive it can hold people back from taking calculated risks such as starting a business or training for a new career.

“The new Prime Minister has rightly pledged to improve life chances for all – at the centre of this effort must be a commitment to support people get free from unmanageable debt so they can get on in life.”