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Young people face “stifling” levels of debt


Young people are facing “stifling” amounts of debt as they borrow from banks, payday lenders and family members, according to debt charity Citizens Advice.

The debt charity has revealed that 102,296 people aged 17 to 24 years old asked for advice in regards to debt problems in the last year, an increase of 21% from 2014.

Challenges in the career market, the housing crisis and student loans has meant that the average debt in bank or payday loans among people aged 17-24 rose from £969 to £4,577 between 2006 and 2012. Loans from family and friends rose from £30 on average to £1,000 over the same period.

Overall, young people had an average secured debt of £12,215 in 2012, which is more than three times the average amount the same age group owed before the 2008 financial crisis. This is the equivalent of 70% of income for 17-24 year olds, compared with 34% for 25 to 29-year-olds and 11% of 60 to 64-year-olds, the charity said.

Gillian Guy, chief executive of Citizens Advice said:
"A new generation of young people are starting out with stifling levels of debt.
"Many young people already face challenges getting on the career and housing ladders - doing this while saddled with huge unsecured debts make it an uphill struggle.

"As well as looking for a longer term solutions, it is important people can get independent advice, guidance and support about how they can manage their finances."

Joanna Elson chief executive of the Money Advice Trust, the charity that runs National Debtline, said:
"We are facing the very real risk that debt becomes the norm for young people. While many will go on to earn enough to help them manage this early borrowing, many will not and this could have serious consequences for their futures.
"The more young people borrow as they set out in adult life, the harder it will be to start saving for the future and afford the homes and lifestyles that they rightly aspire to."

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