Debt concerns only kick in over £3000
Debt concerns only kick in over £3,000
However, survey finds that 18-24 year olds have the lowest debt tolerance level
Worries about debt levels do not kick in until debts reach £3,079, according to research by R3, the insolvency trade body1. However, this figure dropped to £2,153 for 18-24 year olds, the lowest mean amount across all age groups. This amount rose above the average to £3,395 for men and fell to £2,751 for women.
Frances Coulson, R3 President commented:
“It’s a relief to see that young people do not think it is acceptable to get into thousands upon thousands of pounds worth of debt, and in fact have a lower tolerance level than any other age group. However, it is important to point out that even £2,000 is a significant amount of money to owe. Unemployment levels have been increasing and so any amount of debt when you are not earning could be disastrous for your personal finances.”
Nearly half (48%) of 18-24 year olds said they would go to their parents, grandparents, or other family member first if they needed to borrow money, compared to an average of 20%. Across the board, the largest proportion of people cited the bank as their first port of call (33%) but only 18% of young people said the same.
Worryingly only 2% of 18-24 year olds said they have savings so they don’t need to borrow money, significantly lower than the average of 18%.
Frances Coulson, continued:
“The fact that young people are more likely to borrow from their parents, grandparents or other family, than the bank might represent sensible thinking on their part but could result in additional strain on their families. They are getting what is most likely to be interest free credit, but according to an early survey2, 48% of 45-55 year olds are worried about their current level of debt and this may well be as a result of supporting their grown up children.
Frances Coulson continued: “Only 2% of 18-24 years have savings so don’t need to borrow money, however again, the earlier survey found that nearly half (48%) are worried about their level of debt. Clearly there needs to be better financial education for young people to avoid them getting into serious financial trouble later in life.”
Singletons are also more like to borrow from family with nearly a third (30%) saying this would be their first option, compared to 17% of married couples. However 38% of married couples citied the bank as their first choice, compared to only 22% of singletons.
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Notes to editors:
- Methodology note: GfK NOP interviewed 969 adults 18+ by telephone between 30th March – 1st April. Data has been weighted to bring it in line with national profiles.
- Methodology note: ComRes interviewed 2005 GB adults online between 25th and 26th January 2012. Data were weighted to be representative demographically of all GB adults. ComRes is a member of the British Polling Council (www.britishpollingcouncil.org) and abides by its rules. Full data tables are available at www.comres.co.uk
R3 Press Office