Debt endemic among British youth

Debt is now endemic among young adults – with 90 per cent in debt by the age of 21.

A poll of 4,000 people aged 18 to 24 showed 46 per cent owed over £2,000 and one in five owed over £10,000.

A report by Rainer, a national charity for under-supported young people, reveals debt is particularly an issue for disadvantaged young people, who are surviving on low incomes.

In particular, people in this bracket owe smaller amounts – to family and friends, to catalogues or on store cards – but are less able to repay or manage what they do owe.

For one in five of those polled, after paying debt they only had £50 a month and one in ten had no spare cash after paying debts.

Rainer chief executive Joyce Moseley explained poverty and a lack of financial skills were the two underlying causes of debt among young people.

“Interviews with our young people showed that more than a third of them are left with less than £5 a week after debt repayments, bills and living costs and one in five are left with nothing at all," she said.

"One unexpected expense can see their debts spiralling out of control and this has a devastating impact on their lives."

Research by mental health charity Mind also shows debt is a major influence in mental health problems – with 91 per cent of those with debts saying their mental health deteriorates.

The Rainer report found the spread of student loans had helped to normalise debt among young people and give them a relaxed attitude to debt.

However, store cards and credit from retailers was also high among young people – taken in by initial offers but finding high long term costs.

In response to the findings, Rainer is calling on the government to cut the availability and marketing of store cards, increase information available to young people about the full costs of debt and shake up the benefits system so housing benefit can be claimed more easily for those studying for GCSEs and A-Levels.

Daniel Barnes