Past Articles for the Debt and Young People Category

Bad borrowing decisions can have effects that last for years and even decades, it has been suggested.

According to Wendy van den Hende, chief executive of the Personal Finance Education Group, young people often make decision to borrow money that can leave them with a serious debt management headache and a struggle to become debt free.

As a result, it is important that teenagers and consumers aged in their 20s have access to information and advice about financial products and services that could help them avoid long lasting problems, Ms Van den Hende maintains.

“Young people have to make increasingly complex decisions in a very sophisticated world and often at a very early age - they need all the help they can get,” she said.

“They have to make very complex decisions and it is very easy to get it wrong.”

According to a study carried out earlier this year by YouGov on behalf of the Rainer charity group, more than three-quarters of all young Britons have been or are currently in debt.

By Frank Charlton

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Elderly parents are adding the financial strain for almost 1.7 million adults around the UK, a new report has suggested.

With millions of people already facing debt management difficulties, close to one in ten are using their own cash to help their parents, according to Engage Mutual Assurance.

Often the money is needed by pensioners to pay for their everyday expenses, while many thousands of consumers are dipping into their pockets to cover the cost of care for theiri elderly parents.

“As costs of living increase, retirees are finding it increasingly difficult to make ends meet,” said Karl Elliott from Engage Mutual Assurance.

“Hard times people often turn to family members for support and, as our research shows, this is the case for elderly relatives as well as young adults.”

A report from Key Retirement Solutions recently revealed that an increasing number of Britons aged over 55 are approaching pension age with a sizable debt management burden.

Written by Giles Stevenson

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Young British consumers need help with their debt management issues as early as possible, it has been claimed.

According to the Nationwide Building Society, teenagers and young people in Britain are increasingly using debt as a way to fund their lifestyles and help needs to be on hand if they are to cope with the resulting financial pressures.

The suggestion from the building society came in response to the Financial Service Authority’s launch of a new website aimed at helping young people gain a better understand of money-related matters.

“We believe the FSA website, ‘What About Money’ is a really good tool as it should go a long-way towards helping educate teenagers to cope with the challenges of purchasing a house, going to university and managing household bills,” said Maxine Taylor, corporate affairs director at Nationwide Building Society.

The latest data from Credit Action shows that the scale of the UK’s personal debt management burden increases by close to £300 million every day.

Written by Giles Stevenson

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The Financial Services Authority (FSA) has launched a new website intended to help young British consumers who are struggling to deal with their debts or finances in general, it has emerged.

Dubbed the “What About Money” website, the FSA’s latest online portal will aim to offer useful information on financial and debt management issues to teenagers and people aged in their early 20s.

The site has been established partly in response to a survey by the charity group Rainer that found more than three-quarters of young Britons have been in debt and that many of them had faced serious difficulties in becoming debt free.

“We want to provide information that young people can trust, coming as it does from an informed and authoritative source, in a way that engages and interests them,” said Chris Pond, FSA’s director for financial capability.

Rainer’s report on the extent of debt problems among young Britons concluded that such concerns have become endemic among people aged under 21 around throughout the UK.

Written by Frank Charlton

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The boom in the price of properties across the UK has been a disaster for many thousands of people not yet on the housing ladder, it has been claimed.

According to Paul Holmes, chief executive Firstrung, the dramatic increase in house prices has been good news for “middle England” but harmful to the prospects of younger consumers.

Would-be first-time buyers have been left with the prospect of a serious debt management burden if they want to get on to the housing ladder in a climate of falling prices, Mr Holmes maintains.

“Quite frankly, for first-time buyers it was not good news that property prices were going up, it was a bloody disaster,” said the Firstrung boss, whose company offers various solutions to people looking to get on the housing ladder.

The latest figures from Nationwide Building Society showed that April saw the sixth consecutive month of falling house prices in the UK.

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Aging Britons are increasingly emptying their pockets in order to help out their children and grandchildren financially, it has been suggested.

More and more grandparents in the UK are using their own funds to provide assistance to their often-indebted offspring, reports the savings scheme KidStart.

Thousands of British grandparents have debt management issues of their own but six per cent are helping younger generations of their family to raise enough cash for a housing deposit.

Furthermore, almost one in three aging Britons are using their money to make sure their grandchildren have the toys and clothes that they want.

Among the most common reasons for grandparents to dig into their pockets and help out the younger members of their family is to assist them in buying a new car, KidStart reports.

Figures from Credit Action have shown that British consumers of all ages pay out close to £257 million in interest on their collective debt management burden every day.

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Teenagers are looking forward to leaving their debt free days behind and taking on credit card debt, according to a new study.

A group of psychologists, economists and industry experts - called the AXA Financial Task Force - concluded that up to 44 per cent of those aged between 15 and 17 will take on credit card debt as an adult.

Nearly a fifth expect to take out a bank loan at the age of 18, while overdrafts are expected to be a reality for 17 per cent.

However, a study by the group found that the majority of teenagers - 70 per cent - do not have the necessary debt management skills, having failed a weeklong budgeting experiment.

Commenting on the findings, Professor Nick Chater said this inability to budget could be why teenagers are already thinking about taking on credit card debt and other forms of credit.

“These things are seen as the norm so that teenagers think they’re only doing what is typical in expecting to get into debt sooner rather than later,” he added.

Earlier this week, the UK Social Investment Forum noted that 65 per cent of 1,000 young people polled said they plan to make a difference in environmental and social issues through making ethical financial choices.

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Debt is endemic among young people around the UK, according to a new report from the charity group Rainer.

Almost nine in ten of the respondents to a survey by the organisation said that they were dealing with debt management issues by the age of 21.

Rainer’s charitable efforts are aimed at helping disadvantaged children across the country and these young consumers are among the most likely to see serious consequences result from their borrowing habits.

A lack of skill in dealing with money and pre-existing poverty are thought to be some of the main reasons why many thousands of young people have found themselves struggling to become debt free.

Reflecting on the precariousness of many young consumers’ finances, Rainer’s chief executive Joyce Mopseley said: “One unexpected expense can see their debts spiralling out of control and this has a devastating impact on their lives.”

A report from the mental health charity Mind recently aimed to highlight the link between debt woes and serious psychological problems.

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Younger generations of British consumers have a better idea about how to handle their debts than their older counterparts, it has been suggested.

Writing for the Observer recently, Huma Qureshi makes the case that teenagers across the country have developed a better understanding of how to maintain control of their debts than their parents’ generation.

In fact, many young Britons are teaching their parents how to avoid debt management problems and to have a healthier bank balance, according to Ms Qureshi.

A host of young Britons explained to the columnist how they have already developed some good financial habits and are aiming to avoid debt problems as they go through life.

“Until recently, credit was always so easy for us to get hold of and you could buy on impulse,” said Carl Horne, director at Urelife, a new pre-pay cash card for young people.

“But now we have to start reining in and as we do our children are starting to learn that they need to manage their finances better.”

Last week, mobile banking firm Monilink reported that more than two-thirds of young Britons have gone into debt in order to fund purchases they hope will make them seem cool.

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A desire for ‘blinging’ accessories and fashion items in general has seen many thousands of young Britons head into the red, it has emerged.

Research carried out on behalf of the mobile banking firm Monilink has suggested that as many as seven out of ten UK consumers aged between 16 and 43 are in debt because they want to be seen as cool.

However, for almost a quarter of Britons in this age bracket, the resulting
debt management headache has become a cause of “significant” concern.

Around 19 per cent of young people use debt to fund their clothing purchases, while 21 per cent use credit in order to go out and socialise, the latest figures suggest.

John Milliken, managing director of Monilink, said: “This study highlights the price younger Britons are willing to pay for peer acceptance. But for many, the price is too high - leading to financial problems.”

Meanwhile, research published recently by Abbey revealed that almost one in five British children aged between 11 and 15 are already afraid of being in debt in adulthood.

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