Citizens Advice reports that people aged 17-24 years old came to them with 102,296 debt issues in the last year – 21 per cent more than the previous year. The charity says this increase comes against a backdrop of the explosion of unsecured borrowing among young people which risks trapping a new generation in problem debt.
Citizens Advice has analysed official data which shows young people have an average unsecured debt of £12,215 – more than three times what it was (£3,988) before the financial crash. The report finds that young people have an average debt to income ratio of nearly 70 per cent, compared to 34 per cent for 25-29 year olds and 11 per cent for 60-64 year olds. It is also worth noting that youth indebtedness is one of the key focuses for the FCA, as set out in its 2015/16 Business Plan.
The report by Citizens Advice also adds that UK households already owe £170 billion in unsecured debt and forecasts suggest this could hit £350 billion by 2020. Citizens Advice report that unsecured debt is growing faster than secured debt and faster than incomes, pushing debt to income ratios back toward pre-crisis levels by 2020.