Young people see level of debt double
30/01/2015
Young people aged 18-34 have seen the level of their debt double within a year, research from the price comparison website, MoneySuperMarket, has found.
Consumers of all ages now owe a total of £196 billion collectively in debt. This is an increase of 41% from last year, and the average amount people owe on unsecured credit has risen to £5,898 each. People aged 18-34 have seen their unsecured debts rise from an average of £5,446 to £10,058 now.
Consumer borrowing continues to rise, and 47% of those in debt now owe more than they did last year. Only 36% of borrowers think they will pay off their debts within a month, with a further 24% expecting it to be cleared within a year. However, 14% of borrowers think they will be saddled with the debt for two to five years.
Half of people in the UK owe money on a credit card, 23% regularly go into debt due to their overdraft and 12% have a personal loan.
Dan Plant, consumer expert at MoneySuperMarket said:
“This research begs the question whether the economic recovery being celebrated by politicians is simply based on a rapidly climbing debt time-bomb.
“Not only are personal debts up by 40% across the board - with under 35s worryingly seeing what they owe more than double in just a year – they are being paid off more slowly than a year ago. This suggests the British public may be robbing Peter to pay Paul, with the increased consumer spending we’ve witnessed just a by-product of this – which would be hard to sustain. It was borrowing at excessive levels that was one of the contributing factors to the economic crisis so we must hope we aren’t witnessing a repeat of mistakes of the past.”
Need financial advice?
If you have any personal finance questions related to this news article, then please contact our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.
Share this..
Related stories
FCA announce cap on pay day loan interest rates
11/10/2014 The Financial Conduct Authority (FCA) has announced a cap on the amount of interest that pay day loan companies can charged their customers. The new regulations announced mean that pay day loan interest rates will be capped at 0.8% of the amount borrowed a day, including fees. Fixed default fees will be capped at £15, and borrowers must never have to pay back more in fees and in...
Read MoreBank lending to UK businesses remains weak
The Bank of England has confirmed that Bank lending to UK businesses continues to remain weak although there has been a sharp decline in the number of bad loans which were written off by the UK banking sector. However, even those UK businesses which have managed to obtain finance in these most testing of times have been paying very different rates! The general trend would appear to show that sm...
Read MorePayday lenders lack competition
11/06/2014 The Payday loans market lacks competition and is resulting in many customers paying more than they need to, according to the Competition and Markets Authority (CMA). The CMA found that this lack of competition could be resulting in a typical customer’s annual bill increasing by around £30 to £60. The regulators will need to look at the possibility of implementing various so...
Read MoreHigh-cost lenders escape the wrath of the OFT
With the Office of Fair Trading (OFT) has, after a year-long investigation, decided not to impose pricing restrictions on high-cost lenders such as pawnbrokers, payday lenders and doorstop lenders. While there is some disappointment that the authorities have yet to step in and cap the current array of charges, with some interest rates in excess of 1000%, there was a feeling that by interfering wit...
Read MoreBritish holidaymakers prepared to increase their debts
It has been revealed that up to £12 billion will this year be borrowed by UK holidaymakers to cover the cost of an overseas holiday. This comes despite the fact that personal debts in the UK have reached levels the likes of which we have never seen before and more and more people are forecast to stare bankruptcy in the face over the next 12 months. But why are UK consumers willing to increase the...
Read More