The bank's study links this need to a lack of savings, claiming that over half of Britons have less than two months' salary saved.
Richard Jones, Scottish Widows interim production market director, said the report's findings reflected wider trends.
"Our report reveals that the mixture of relatively low interest rates and high job security means borrowing has been an attractive option in recent years," he explained.
"The problem is that servicing this debt eats into our take home pay and exposes us to financial hardship should we be unable to work. Low inflation also means debts are eroded more slowly over time - again increasing the need for financial protection."
Scottish Widows' report estimates that the average household with two dependent children holds around £100,000 of debt, nearly one-fifth more than that held by the average household with no children.
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