Past Articles for the Debt and Young People Category

New research has found 23.8 per cent of British travellers aged 18 or under has been a victim of theft.

The study by Tesco Personal Finance found 63 per cent of people do not set a daily spending limit while on holiday, potentially racking up debts to face when they get home.

In total, nine per cent of British holidaymakers have had their wallet or purse stolen and seven per cent have had something taken from a hotel safe or deposit box.

Around four per cent resort to hiding their money in their underwear and 10 per cent using bum bags.

Tesco has urged people to be more careful when abroad by using forms of money that may be safer. The bank has launched its own travel money card to avoid debts caused by thieves using stolen debit or credit cards.

It was reported last week by Credit Expert that 2.5 million holidaymakers are expected to find themselves in debt this summer.

By Morwenna Kearns

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People about to start university have been offered advice on managing financial matters at a time when many students run up credit card debt.

The tips, from Moneyfacts, are to prepare many students for their first experience of managing their own money.

The website has urged students not to be “fooled” by incentives from banks offering student accounts, particularly when an NUS card may offer the same discounts banks are offering.

Furthermore, students are recommended to shop around for the best overdraft deal and credit rate of interest. Students should however be warned that “free” overdrafts do not remain so indefinitely.

Moneyfacts also reminded students about household bills and suggested a budget plan to work out disposable income.

Warnings are also made about credit cards and the danger of ignoring debt management problems – students are advised to seek help from their bank or university counsellors.

According to the Times, the pass rate for last year’s A-Level results rose for the 25th year running.

By Morwenna Kearns

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Those who have recently finished university have been offered tips on finance and getting out of debt.

Moneyfacts has said post-university debts are likely to be spread between credit cards, overdrafts, the Student Loans Company and graduates’ parents.

The financial information website has suggested a number of ways to address this and become a debt-free graduate.

A monthly budget is recommended once full-time employment is arranged, which shows how much can be put aside for repaying debts after all income and outgoings.

Once the figure is established, Moneyfacts suggests making a “sensible” debt repayment plan. Paying off all student debts in one go is not necessary, the site says, but it should be a priority. Student loans are to be paid off over a working life.

To avoid further debt, choosing an interest-free graduate overdraft and credit cards with zero per cent balance transfers is recommended. However, attention should be paid to changes to authorised limits and fees for unauthorised borrowing.

The majority of graduates leave university with debts running into five figures, Moneyfacts said.

By Morwenna Kearns

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Parents across the country are underestimating the levels of debt their children are likely to take on if they study at university, according to a new report.

Data compiled by the Association of Investment Companies (AIC) have shown that on average parents believe that their son or daughter would be around £9,681 in the red when they graduated but the typical figure is almost £13,000.

And the debt management position of newly graduated Britons could be set to worsen further because three-quarters of parents feel that the credit crunch has made it more difficult for them to help their children financially while they study.

Annabel Brodie-Smith, AIC communications director, said: “It’s alarming that few of tomorrow’s graduates or their families really comprehend the financial implications of top-up fees and both have underestimated the amount of student debt they will face on graduation.”

The struggle to become debt free is now understood as a normal part of being young adult in the UK, a report from the charity group Rainer suggested earlier this year.

By Giles Stevenson

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More needs to be done to help children from ethnic minorities who are living in poverty, one organisation has claimed.

Child Poverty Action Group (CPAG) responded to a report published by a parliamentary committee today by saying that “a much more concerted effort” is required if the government is to improve skills among workers and help them get debt free.

It also claimed that employer discrimination needs to be addressed if the government is to hit its target of ending child poverty by 2020.

Kate Green, chief executive of CPAG, said: “The risk of poverty for children in ethnic minority families is much higher than average and twice as high for some ethnic groups. Lack of access to employment and low pay are key reasons.”

The CPAG recently branded it “shameful” that 3.9 million children in the UK live beneath the poverty line.

By Neil Condron

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Children who find that their requests for money are being increasingly rejected by cash-strapped parents ought to think about opening a savings account, it has been claimed.

The debt advice was offered by MoneyExpert following research from Axa which found that the effects of the credit crunch are now being passed from parents to children.

MoneyExpert agrees that remortgage costs, fuel and food prices and borrowing costs are all beginning to take their toll on parents and suggested that children should get into the habit of saving - rather then relying on loans from the bank of mum and dad.

“While high street banks can hike interest rates and fees to deter customers’ requests for cash, parents can do very little to avoid the daily handouts and requests for larger loans from their children,” said Sean Gardner, chief executive of MoneyExpert.

By Neil Condron

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Families that are struggling to meet their everyday living costs are being urged to tell their story as part of an effort to highlight the extent of child poverty in the UK.

The government has pledged to reduce child poverty by half by 2010 and Citizens Advice is keen to provide evidence of the financial problems people are facing.

Millions of British parents have debt management issues to deal with and being in the red can make it tough to find money for PE kits and school uniforms.

Citizens Advice wants to hear the difficulties parents and their children are facing as a result of being financially over-stretched as part of its ongoing End Child Poverty initiative.

“The information collected nationally will be presented to the government to make sure they know what life is really like for many parents and their children,” said Johan Jensen, campaigns officer at Citizens Advice.

A recent survey carried out by the charity found that a majority of people aged between 16 and 24 had been urged to take on debt they did not want or could not afford.

By Frank Charlton

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Parents around the UK are tightening their lending criteria as the impact of the credit crunch continues to be felt, according to a new report.

Axa Insurance insists that millions of mums and dads around the country are getting tougher on their children as they aim to save money and ease their own debt management problems.

Many teenagers have found that they can no longer borrow money from their parents, while others have seen their pocket money levels dwindle in recent months as household budgets continue to feel the strain.

Alison Green from Axa said: “The Bank of Mum and Dad has so far been quiet on the issue of how it will deal with the effects of the credit crunch.

“But now it has come out and shown teenagers have been hit hard.”

An increasing number of Britons are taking on debt management burdens in their teens and the problems associated with going into the red are “endemic”, the Rainer charity group claimed earlier this year.

By Giles Stevenson

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The government has unveiled its plan to tackle the relative lack of financial capability among consumers across the country.

As part of the so-called Financial Capability Action Plan, the Treasury and the Financial Services Authority (FSA) will be aiming to ensure that people struggling to become debt free have greater access to expert advice and relevant information that could help them.

Among the arrears of focus for the plan will be the provision of internet-based resources, such as the FSA’s Moneymadeclear website, which will include a section dedicated to dealing with debt management problems.

In addition, the plan will aim to ensure that young people across the country are familiar with the kinds of finance-related issues they are likely to face as they approach adulthood.

Earlier this month, Treasury minister Kitty Ussher announced that the government is to introduce a range of measures aimed at bolstering the efforts of credit unions across the country.

By Dan Mather

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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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