More than one million young Britons are struggling to cope with debt, the Consumer Credit Counselling Service has revealed.
In its report ‘Debt and the Generations’, the CCCS says consumers under the age of 40 are struggling against higher built-up debts, reducing real incomes and increasing difficulties in saving for retirement.
The research found more than one million (1,039,000) households in the 18-39 age group are already struggling to cope and a further 893,000 are “at risk” of falling into difficulty.
Almost three-quarters of people aged 18 to 39 now have unsecured debts, compared to around 60% of the 40-54 age group, says the CCCS.
The debt charity found younger households are more likely to be behind with their debts, with those in the 25 to 39 age group more than twice as likely to be in arrears or insolvency as those in the 55+ group (15% compared to seven percent)
The CCCS cites the rapid rise in house prices in the 10 years to 2007, from around 2.3 times to nearly 5.5 times gross earnings, has left young homeowners with extra mortgage debt.
And the changes to university fees will only worsen the situation. Total student debt is expected to grow to £153bn in real terms by 2031, with loan repayments amounting to nearly £7bn a year, according to the CCCS.
Wilf Stevenson, CCCS chairman, says: “The younger generations are facing a worrying future. Higher debts and fewer assets will put many in a precarious financial position, and these trends threaten to impact considerably on quality of life in later years.
“It is also essential they are protected from the aggressive practices of commercial debt management companies who will only add to their debt burden. Making sure that consumers know they can turn to debt charities such as CCCS for free advice and support must be a key part of our strategy in dealing with this problem.”
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