Cost-of-living crisis: Two thirds of 18-34 year olds taken on new debt
Two thirds of people aged between 18 and 34 years old say they have taken on new debt due to the cost-of-living crisis, new research reveals.
A poll of 2,000 UK adults from this age group, conducted by The Mortgage Lender, found that young people are becoming increasingly reliant on debt.
The lender warned that this could impact on credit scores and their future plans to buy property.
Read more: Plend chief: Skyrocketing credit demand raises ethical concerns
10 per cent of respondents said they have taken out a personal loan this year, while 11 per cent said they have taken out a payday loan, which typically has much higher interest rates.
18 per cent of respondents said they are using buy-now-pay-later schemes in response to rising costs.
Read more: 36H Group: P2Ps have role to play in cost of living crisis
An additional 25 per cent have made greater use of their credit card, and 16 per cent of respondents are using their overdraft more.
“Taking on any debt is risky, but to see younger generations take on the insecurity of a pay-day loan is troublesome,” said Peter Beaumont, chief executive of The Mortgage Lender.
“As cost-of-living concerns grow with rising energy costs, there’s a concern that later life plans can be severely impacted by the decisions individuals are being forced to make due to the current economic circumstances.
Read more: Fintech Pledge fighting cost-of-living crisis welcomes 10 new members
“While taking on debt may help some to deal with their immediate expense, it’s vital that they take it on with their eyes wide open and with a repayment plan in place. This will prevent the situation snowballing out of control and help get back in the clear as soon as possible.”
