Debt-ridden consumers getting younger

2013-03-20 12:55

The average age of consumers falling into debt has fallen from 42 to 34 in the past five years, a debt management company has said.

“The latest data is by far the most worrying as it shows that it is the younger generation that is getting into trouble with debt and getting into trouble quickly,” said DebtBusters spokesperson Ian Wason.

Nearly 50% of all credit-active consumers were struggling with debt repayments.

“From a macroeconomic point of view, the credit providers are in effect taking these crucially important consumers out of the economy.”

Wason said once a young person had too much unsecured debt, they were unlikely to ever be able to buy a house, start a business, or save for the future.

In recent years, unsecured credit had been growing at rates of up to 40%.

“Unfortunately, we can see very little evidence of this money being used for anything other than consumption.”

People were spending more than they earned and this could only end in a debt spiral, with consumers taking out increasingly expensive loans to keep up with existing loan repayments.

“DebtBusters implores credit providers to perform more stringent checks on their clients before they lend, to implement some form of percentage cap on net income-to-debt repayments.”

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