According to a recent poll, young people are surprisingly and overwhelmingly bearing the brunt of challenging debt situations, whilst the older generation appear to be escaping the rising costs of living and incurred financial stresses.
The Populus poll of 1,775 adults found that 55% of younger people aged 18 to 24, and 48% of people aged 25 to 34, say their debts have increased in the past five years. However, only 13% of people aged over 65 declared the same, highlighting an alarming difference in the generations which is more prevalent today than ever before.
Last year, the Institute for Fiscal Studies released a report suggesting that there was an ever obvious regression in wealth between the generations for the first time since the Second World War.
The research was based on respondents being asked to calculate their debt. The debt could include credit card bills, outstanding mortgage or rent payments and any student or short term loans payments. (click the jump to check out an example of this from Wonga).
When looking at the data in more detail, the majority of young people have debts of more than £2,000 and nearly a fifth owe more than £10,000.
The cause of rising debts in younger people
30% of 18 to 24 year olds put their debts down to investing in their future, but most said that the debt was down to unexpected expenses. This might include anything from rises in rent, to car payments and energy bills.
Another issue, of course, is that many students are saddled with unpayable and unrealistic university debt when they leave education, some up to £60,000. This type of debt means no younger person really has a chance of ever being debt free anytime soon. However for the over 65s, generous benefits have remained in place which could help to explain the gap even further.
What this could mean
Many people are already seeing the struggle for younger people to get on the housing ladder. With debt holding them back, younger people could be deep into their 40s before they manage to buy their own home. Older working ages may well be seen in order for people to meet their financial potentials, possibly 10 to 20 years later than current pensioners. People of the current younger generation could be working until they are 75 quite easily. This could also mean later starts for couples to have families, or couples may choose to have no children.
Having debt can cause stress, anxiety and many sleepless nights. The good news is that there is a way out. Many debt charities, such as StepChange, can help you to figure out a plan for repaying your debts. Some will also speak to creditors on your behalf and try and negotiate a deal with them, so that they stop harassing you for payments.
Image credits to William Murphy