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The Growing Debt Problem for under 25's in the UK

Not at any time since the last major economic recession of the 1990's have so many people in the UK suffered so much with debt problems. Although the principal underlying economic factors look good on the surface, a closer inspection of the statistics reveals a structural debt problem in the UK, manifested by the total amount of personal debt exceeding the trillion pound mark in July 2004.

Previous cycles of economic decline have seen a combination of high interest rates and unemployment; affecting mortgage holders especially. This time around, however, 18 to 25 year olds are reporting difficulties with repaying their credit card debts and other personal loans.

According to the UK charity, the Consumer Credit Counselling Service (CCCS), there has been a rapid rise in the percentage of 18 to 25 year olds reporting with debt liability problems, doubling from 6% to 13% since 2002. The CCCS reported that the average amount of money owed by under-25's who contacted them has gone up from £ 12,000 to £ 15,000 in the last 2 years; an increase of nearly 25%.

The CCCS argue that there is a generation growing up in the UK, who have been exposed to a combination of consumer pressure and easy credit. The


young have become "desensitised" to debt and are borrowing money to purchase non-essential items. Student loans have meant that large bank overdrafts and credit limits have become the norm for many young people. Also many of the younger generation need to borrow large amounts to buy a home, for example, and usually have no savings or assets to fall back onto when they run into mortgage arrears.

Indeed the CCCS are telling more young people to take bankruptcy as an option to solve their debt problems, many of these graduates, and still in their 20's.

It's too soon to say whether the growth in the number of 18 to 25 year olds facing debt problems is a real phenomena, or part of a general problem that is affecting the UK, but credit agencies are becoming increasingly concerned.

About the author:

Debtsolver is a UK company providing resources and information on Debt Management UK, Debt Consolidation UK, Debt Problems UK and IVA & Debt Advice