10th February 2014
More than three times as many young people than pensioners are bearing the brunt of increasing debt, according to findings revealed by think tank Demos.
Some 55% of 18-24 year olds, and 48% of 25-34 year olds, said that their debt had increased over the past five years, compared to only 13% of over-65s.
In comparison, only 12% of 18-24 year olds, and 28% of 25-34 year olds, saw their debt decrease during the same period.
The majority of young people said they had over £2,000 of debt. However, a fifth, at 19%, of both 18-24 year olds and almost a quarter at 22%, of 25-34 year olds revealed they currently owe in excess of £10,000.
The study found that although there may be positive reasons for getting into debt – such as funding their studies – the reasons are much more likely to be negative, with many struggling to make ends meet at the end of each month.
Amongst 25-34 year olds: 35% got into debt due to ‘unexpected expenses’, 28% could not ‘afford the basics’, while 27% cited a ‘one-off purchase’.
Of the 18-24 year olds surveyed, less than a third, at 30%, put their rising debt down to positive reasons such as ‘investing in their future’, despite being the most likely group to have taken a student loan. Some 28% cited ‘unexpected expenses’, 27% to ‘afford the basics’ and 18% to cover their rent.
Demos researcher Jo Salter says: “When we talk about rising debt levels, it is young people in their 20s and 30s who are bearing the brunt. This is a time in their lives when previous generations would be thinking about starting a family or trying to get on the property ladder. Instead of saving for the future, they are being dragged into debt just to meet the costs of living.”
The findings come from a Demos poll of 1,775 adults. Respondents were asked to calculate the full extent of their debt, including credit cards, rent and bill arrears, and any combination of bank, student or payday loans.