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The collective bank balance of the UK's younger generation is well into the red, according to new statistics.
Figures released by financial comparison site uSwitch.com have revealed
that as many as 1.8 million Britons between the age of 18 and 29 are
permanently overdrawn, demonstrating the need for debt consolidation
loans to help young Brits manage their finances more effectively. By
taking out a debt consolidation loan, a person can put all their debts
into one, more manageable, monthly repayment, reducing the likelihood
that they will become overdrawn because of many different debts biting
into their bank balance over the course of a month.
While six million young Britons have bank accounts which contain an
optional overdraft facility, two-thirds of them regularly exercise this
option because of the various financial burdens placed upon them during
the course of a month. More than one in five young Brits admitted to
owing over £1,000 to their account, while the average overdraft among
this age group currently stands at £656.
The survey claims that this high proportion of young people using
overdraft facilities is twice the national average. One reason for such
high levels of debt has been the impact on bank balances of attending
university and, with recent changes to the funding of higher education,
it is anticipated that the debt concerns of young people will only get
worse. Further, unless the current generation of young Britons is able
to solve their debt problems over the coming years, for example by
taking out a debt consolidation loan, they will have less money to
provide for their children by the time they are preparing for
university.
Nick White, head of personal finance at uSwitch, commented that many
young people have a "relaxed attitude towards debt" which is resulting
in many Britons happy to get into debt "as a means of paying for life's
essentials".
Mr White added: "In most cases the first time young people are
introduced to credit will be in the form of an overdraft, often
interest-free, and understandably there is a temptation to utilise what
is on offer without thinking about the long term consequences."
However, Jason Clarke, a spokesman for Halifax, has rejected
suggestions that young people are naïve when it comes to debt. "Young
people now are probably more aware of debt issues," he suggested.
Mr Clarke continued: "We are beginning to see a different approach to
student financing. Parents start saving from the day that their child
is born."
Taking out a debt consolidation loan can prove a useful way to reduce
the burden on your bank account, thereby making it less likely that you
will continually need to dip into the overdraft facility, which can
become a dangerous habit. |