Young adults are the most likely to resort to credit cards or loans to cover housing costs, new research from debt advice and solutions provider Debt Advisory Centre shows.
Almost a third of 18-24 year-olds relied on credit to pay their rent or mortgage last year, while the overall proportion of borrowers who resorted to credit stands at 16 per cent, the study revealed.
Young people are clearly more vulnerable and seem to be piling up a huge amount of unsecured debt which they would have to repay at some point. With the ever rising cost of living they may be saddled with it for a long time though.
A fifth of 18 – 24 year-olds admitted they have fallen behind with their rent and mortgage payments.
“It is incredibly worrying to see such a high volume of young people struggling to make ends meet. Financial independence is something that should be encouraged, but clearly it is increasingly out of reach for many. As a society, we must ensure that we are equipping young people to make sensible financial decisions and giving them the means to do so,” Melanie Taylor, spokeswoman for Debt Advisory Centre, comments.
The study also found that a quarter of young adults needed to borrow money to pay their utility bills and a third are worried they would not be able to pay their next bill.
Figures released yesterday by the Insolvency Service show that insolvency rates decreased for all age groups except 18-24 year-olds between 2013 and 2014. Young women are the most vulnerable with the highest rate of insolvency.
Young people in the UK are also the most likely to be on a zero hours contract, with nearly one in 10 (8.7%) of this age group saying they are in this type of employment. This is adding to their financial difficulties, and may explain why they are having to turn to pay day loans and borrowing from friends and family.