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14th September 2018
New research finds young people regularly borrow to pay bills or everyday living expenses
Young people in Britain are facing mounting debts and unaffordable living expenses, new research from Neyber, a financial wellbeing provider, has found. The study, carried out among 10,000 UK employees, found that an alarming 70 per cent of people under-34 need to regularly borrow either to pay their monthly bills or deal with day-to-day living expenses.
More worrying, young people are turning to more dangerous forms of lending just to get by; 33 per cent of 25-34 year olds are using credit cards for day-to-day borrowing – higher than any other age group.
The younger you are, the more likely you are to use a payday lender; 8 per cent of 18-24 year olds said they had used one, compared with 4 per cent of 25-44 year olds and 0 per cent of those who were over 65. One in 20 young people have resorted to a loan shark.
One of the reasons for this regular borrowing may be that more young people have jobs with fluctuating income; 68 per cent of 18-24 year olds said their income changes each month with 27 per cent saying their income varies by more than 30 per cent.
Neyber found that those in the £20,000-£29,999 earnings bracket – which includes those on an average salary – are spending an average of 37 per cent of their income on debt repayments, including mortgage or rent, per month. Excluding mortgages and rent, the average amount of unsecured debt employees pay each month is £325.
Heidi Allan, head of employee wellbeing at Neyber, said: “Financial worries can lead to sleeplessness, stress and even depression. Clearly our research demonstrates that young people in Britain are not coping and are having to borrow just to get by.
"More needs to be done to support people, whether that’s providing better financial education in schools, working with employers to offer their young staff financial education or even providing debt support and guidance. If we don’t act now, we will see young people in Britain spiralling into debt they’re unable to repay.”