- 29
- Aug
The country is worried as the younger generation sinks farther and farther into debt. The alarming trend starts in the teens, when young people accept bank credit cards without understanding the purpose.
Some watchdog groups have blamed student loans for creating a debt culture where young people believe debt is the price to pay for success. There are very few programs teaching youth to build wealth, instead of falling into debt.
Justine Greening, for the Conservatives, attacked the government over the “growing crisis” of debt levels among young people.
Twentysomethings are hit hardest by debt. They are taxed more following the disbanding of the 10p tax rate.
Angela Eagle, the exchequer secretary, said there is an “issue” around young people, debt and financial education.
But although there are higher levels of debt in the economy, asset levels - at £7trillion - are higher as well. Unfortunately, very little of this belongs to consumers under 35 years old. Most of it is owned by family households over 45 years old.
Many of the younger generation are finding it difficult to pay off their student loans. The problem has become so vast that surveys reveal many young people believe they will not be able to buy a home, or even start a family, for at least ten years.
Other young people are opting for 40 year mortgages, or interest-only home loan products in an attempt to buy their first home. So few young people feel they have a chance for wealth building, that they are not attempting to start their own businesses, or investing.
