Debt mountain rests on the shoulders of the young, says insolvency trade body
Young people are shouldering the highest level of unsecured debt in Britain, according to a new survey. Those aged 18-24 have unsecured debt of £20,396 – more than double the national average of £9,455 for all age groups. But they earn less than the national average wage - £20,396 against £30,508.
The findings were part of a national survey on debt carried out by R3, the Association of Business Recovery Professionals - an organisation which represents 97% of Insolvency Practitioners in the UK.
Patricia Godfrey, President of R3 said, “It is extremely worrying that our young people are so much in debt. Our survey sowed that in many cases they leave university in debt and struggle to pay it off even years later.”
Over half the people aged 18-24 said that student debt was part of the reason for their debt and over a third of those aged 25-34 said the same. Paying for specific items, such as cars and holidays was high on the list of reasons for debt build up, as well as overspending, unemployment and redundancy.
Six per cent of young people say their debt is causing them great difficulties and 1% say it is unmanageable.
Patricia Godfrey added: “It is clear that long before they go to university, young people need to understand the implications of taking on too much credit. This is why R3 is working with the IFS School of Finance to send some of our Insolvency Practitioners in to schools, with specially designed classroom exercises designed to educate children about the pitfalls of debt.”
R3’s members will be supporting the IFS School of Finance qualifications on Financial Capability from the next school term in September 2007.
Source: creditman.biz
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