Alarm Raised Over Growing Debts Among Young Generations
October 23, 2017
Young men and women across the UK are increasingly relying on credit to cover their essential expenses and often finding themselves struggling with serious debt problems as a consequence.
That’s according to Andrew Bailey, chief executive of the Financial Conduct Authority (FCA), whose role it is to regulate all financial markets across the country.
Speaking to the BBC, Mr Bailey said that there is a “pronounced build up of indebtedness among the younger age group,” in reference principally to people aged between 18 and 34.
“This is directed at essential living costs. It is not credit in the classic sense, it is the affordability of basic living in many cases,” he said.
The FCA’s chief executive made his comments after the Insolvency Service revealed that the number of 18 to 34 year olds who entered insolvency in England and Wales between 2015 and 2016 increased by very nearly a third (31.3 per cent).
Mr Bailey said that his organisation is working to introduce regulations that prevent high-cost credit from causing serious financial hardship and indebtedness among certain sectors of society.
In recent years, the FCA has been able to clampdown on payday lenders by limiting how much they can charge their customers as fees and interest payments on debt amounts owed.
However, the regulator is clearly now concerned about the extent to which so many young consumers are relying on debt simply to cover their everyday expenses.
“There has been a clear shift in the generational pattern of wealth and income, and that translates into a greater indebtedness at a younger age,” Mr Bailey told the BBC.
The debt help charity StepChange recently reported that “record numbers of people are getting into debt at an earlier age” and said that almost two thirds of its clients are now under the age of 40.
“Whilst around half of our clients are in work, the rise of the gig economy and insecure, low paid work mean household incomes are less stable and unable to cover the most basic living expenses,” Mike O’Connor, StepChange’s chief executive, said recently.
If you live anywhere in Scotland and struggling to cope with your debts then Scotland Debt Solutions can help. Contact us directly to arrange a free and confidential consultation.