Young people turn to personal loans to cope with cost of living

More than two thirds of young people have taken on debt in order to keep up with the higher cost of living, new research has found.

According to a new report from MoneyTransfers, the average person in debt is between the ages of 18 and 34. The most common types of debt that they are taking on are personal loans and payday loans.

“Life is becoming unbearable to young people in Britain,” said MoneyTransfers chief executive Jonathan Merry.

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“The cost of living is rising, but wages are stagnating. This is creating a perfect storm for debt. What’s even more worrying is that many young people are turning to high-interest payday loans to make ends meet.

“This could have a devastating impact on their financial future.”

Merry warned that young people risk losing out on mortgage applications in the future if they are unable to keep up with their personal loan repayments, and see their credit score drop.

MoneyTransfers’ report follows a similar survey conducted by The Mortgage Lender, which found that young people are becoming increasingly reliant on debt. It also found that two thirds of young people have taken on new debt to cope with the cost of living crisis.

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