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People In Their 20S And 30S Can Either Put Lives On Hold Or Accumulate Substantial Debt, Says Demos Thinktank

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Guardian 10/2/14

'Young people are overwhelmingly bearing the burden of increasing levels of debt, according to a poll that shows how the older generation are escaping the squeeze in incomes.People in their 20s and 30s face a stark choice between "putting their lives on hold or racking up substantial debt", according to the Demos thinktank that commissioned the poll.

The Populus poll of 1,775 adults found that more than half (55%) of those aged 18 to 24 – and 48% of those aged 25 to 34 – say their debts have increased over the past five years. This compares with a 13% rise for those aged over 65.

The findings, part of a report into debt by Demos to be published in March, follow a warning by the Institute for Fiscal Studies last year of a regression in wealth between the generations for the first time since the second world war. The IFS found that people born in the 1960s and 1970s, the immediate post baby boom generation, would be worse off in retirement than their parents.

The Demos study shows the divide in even more dramatic terms as it starts with the next generation – those born in the 1990s. It found that 22% of 18-to 24-year-olds say their debt has increased a lot, compared with 4% of those aged over 65. Only 12% of 18-to 24-year-olds say their debt has decreased over the past five years compared with 32% of those aged over 65.

The pollsters asked respondents to calculate their debt by assessing their credit cards, outstanding rent and arrears of other bills. They were also asked to add up bank, student and payday loans.

The majority of young people have debts of more than £2,000 – 45% of those aged 18 to 24 and 56% of those aged 25 to 34 owe more than that amount. However nearly a fifth (19%) of those aged 18 to 24 and 22% of those aged 25 to 34 owe more than £10,000.A relatively small number of young people (30% of those aged 18 to 24 and 22% of those aged 25 to 34) put their debts down to investing in their future, regarded as positive" causes of debt by Demos. But negative explanations for debt feature heavily. These included unexpected expenses (28% and 35% for the two age groups) and help to pay for the basics – 27% and 28% respectively.

Jo Salter, who is conducting research on the "typology of debt" for Demos, said the findings in the poll show the need to focus resources on younger generations. David Cameron has said that the nation is "all in it together" to tackle the deficit. But critics point out university tuition fees have been trebled while generous benefits for pensioners have remained in place.

Salter said: "Younger people are facing increasing levels of debt compared with their parents and grandparents. The costs studying for a degree, buying a house and starting a family are higher than ever – and people in their 20s and 30s are increasingly facing a choice between putting their lives on hold, or racking up substantial debts.

"If we really are all in it together then the government needs to think carefully about not placing additional pressure on people who are just starting out in life, rather than just protecting those who have passed these milestones."

The findings in the poll illustrate a theme highlighted by the universities minister, David Willetts, in his book, The Pinch: How the Baby Boomers Took Their Children's Future – And Why They Should Give it Back. Willetts argues that the baby boomers, those born between 1945 and 1965, own more than half of the nation's £6.5tn wealth. He says they should do more to share with the young.'

I post this as one of the older generations.It's incredibly sad what we've done to our young people.I honestly don't know how some of our politicans sleep at night.

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As long as we have a compliant media this can all be blamed on the younger generations. Too many A* gcse's, too many illiterate, feckless youths all buying too many iPods or going on holiday. And their expectations are too high, everyone had it hard.

That's the message pumped out, most boomers love it. Pumps up their egos and lets them take the easy way out by letting daily mail journos and Tories do their thinking for them.

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But but, the spend on mortgages is lower than ever, compared to disposable, according to the Mortgage Industry...( those wot produce products)

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Guardian 10/2/14

'Young people are overwhelmingly bearing the burden of increasing levels of debt, according to a poll that shows how the older generation are escaping the squeeze in incomes.People in their 20s and 30s face a stark choice between "putting their lives on hold or racking up substantial debt", according to the Demos thinktank that commissioned the poll.

The Populus poll of 1,775 adults found that more than half (55%) of those aged 18 to 24 – and 48% of those aged 25 to 34 – say their debts have increased over the past five years. This compares with a 13% rise for those aged over 65.

The findings, part of a report into debt by Demos to be published in March, follow a warning by the Institute for Fiscal Studies last year of a regression in wealth between the generations for the first time since the second world war. The IFS found that people born in the 1960s and 1970s, the immediate post baby boom generation, would be worse off in retirement than their parents.

The Demos study shows the divide in even more dramatic terms as it starts with the next generation – those born in the 1990s. It found that 22% of 18-to 24-year-olds say their debt has increased a lot, compared with 4% of those aged over 65. Only 12% of 18-to 24-year-olds say their debt has decreased over the past five years compared with 32% of those aged over 65.

The pollsters asked respondents to calculate their debt by assessing their credit cards, outstanding rent and arrears of other bills. They were also asked to add up bank, student and payday loans.

The majority of young people have debts of more than £2,000 – 45% of those aged 18 to 24 and 56% of those aged 25 to 34 owe more than that amount. However nearly a fifth (19%) of those aged 18 to 24 and 22% of those aged 25 to 34 owe more than £10,000.A relatively small number of young people (30% of those aged 18 to 24 and 22% of those aged 25 to 34) put their debts down to investing in their future, regarded as positive" causes of debt by Demos. But negative explanations for debt feature heavily. These included unexpected expenses (28% and 35% for the two age groups) and help to pay for the basics – 27% and 28% respectively.

Jo Salter, who is conducting research on the "typology of debt" for Demos, said the findings in the poll show the need to focus resources on younger generations. David Cameron has said that the nation is "all in it together" to tackle the deficit. But critics point out university tuition fees have been trebled while generous benefits for pensioners have remained in place.

Salter said: "Younger people are facing increasing levels of debt compared with their parents and grandparents. The costs studying for a degree, buying a house and starting a family are higher than ever – and people in their 20s and 30s are increasingly facing a choice between putting their lives on hold, or racking up substantial debts.

"If we really are all in it together then the government needs to think carefully about not placing additional pressure on people who are just starting out in life, rather than just protecting those who have passed these milestones."

The findings in the poll illustrate a theme highlighted by the universities minister, David Willetts, in his book, The Pinch: How the Baby Boomers Took Their Children's Future – And Why They Should Give it Back. Willetts argues that the baby boomers, those born between 1945 and 1965, own more than half of the nation's £6.5tn wealth. He says they should do more to share with the young.'

I post this as one of the older generations.It's incredibly sad what we've done to our young people.I honestly don't know how some of our politicans sleep at night.

Channel 4 News are dedicating a section of their program to young people all this week apparently.

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Willets is wrong, characteristically. The boomers can't give back a share of their wealth for the simple reason that it isn't real. What he (and Demos) should be arguing for instead is a rise in interest rates to drive out the phantom equity from the housing market, thereby reducing the cost of living at a stroke and saving the country the £120bn/yr that Osborne is required to borrow on an on-going basis to maintain the status quo.

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But but, the spend on mortgages is lower than ever, compared to disposable, according to the Mortgage Industry...( those wot produce products)

Isn't that simply a reflection of the fact people stopped buying houses in 2007, and the majority of properties are owned outright, rather than mortgaged?

My parents and the inlaws both paid off their mortages in the last few years. They have 5 kids between them aged 24-36, only one of whom has a mortgage - most or all of us would have had a mortgage 20 years ago.

I feel that the simplest way to register your disgust with the political/economic system that has failed us is to opt out as far as you can by avoiding debt and never voting for the bastards again. The way I (and to a lesser extent, my fiance) feel at present, we are more likely to buy outright in 10 years time than take on a mortgage. We don't have any debts and we do have pretty decent savings for a couple in their 20's (her) and 30's (me).

Edited by disenfranchised

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People In Their 20's And 30's Can Either Put Lives On Hold Or Accumulate Substantial Debt,

People In Their 20's And 30's Can Either Put Lives On Hold, Accumulate Substantial Debt or EMIGRATE.

There - fixed.

Seriously, the EEA allows anyone to try out different places with very little inconvenience. Rental conditions are generally superior and costs lower. Simply because the UK finds itself in an economic hole of one particular flavour doesn't mean its the same everywhere.

There are always problems but those encountered in Germany, France, Holland or Spain may suit better than becoming an indentured slave to the UK banking industry or a beholden peon to the ever-growing UK landlord class.

Edited by Cozza

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People In Their 20's And 30's Can Either Put Lives On Hold, Accumulate Substantial Debt or EMIGRATE.

There - fixed.

Seriously, the EEA allows anyone to try out different places with very little inconvenience. Rental conditions are generally superior and costs lower. Simply because the UK finds itself in an economic hole of one particular flavour doesn't mean its the same everywhere.

There are always problems but those encountered in Germany, France, Holland or Spain may suit better than becoming an indentured slave to the UK banking industry or a beholden peon to the ever-growing UK landlord class.

Leave friends family and often a stable job behind to go to a country where in all likelihood you don't speak the language? Great for some but you can understand why its not a widespread option.

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Or, just rent until it collapses, perhaps.

Osborne's wet dream is for the young to monetize the phantom equity zugzwang mentions, on whatever repayment terms it takes- 30 year terms, ~zero rates, doesn't matter, so long as they sign on the line.

Despite the undoubted problems in the private rented sector, while you can rent a place for the equivalent of under 5% gross yield it makes no sense to help Osborne soil his bedsheets.

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My life is not on hold, consumption of the standard luxury/leisure goods well and truly is. No TV (telling me what I need), no car, no more cinema. I still socialise, £10 to go see a band with a dance floor, have a few jars, lots of people to dance with. Things that actually make me happy. God help the stock market if the masses cotton on.

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Can I tempt you with Superdry Clothing? Everyone young seems to be wearing that damm logo....

Never heard of it.....but if they advertise it, force it down your face, say you are not cool if you don't have it....don't buy it. ;)

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Leave friends family and often a stable job behind to go to a country where in all likelihood you don't speak the language? Great for some but you can understand why its not a widespread option.

Not really (other than that the entire education/media establishment of the UK is set up to dissuade one from doing so).

Cheap airlines mean there are few parts of the UK that can't be reached as quickly by low-cost air from the EU than they can by UK rail. Friends/family are still available. For example, northern France is closer to London than much of northern UK!

Yes, you may not speak the language but shouldn't life be a learning experience? At least more of one than is provided by paying through the nose to live in a tiny box somewhere truly grim. Even if you speak very little French/German/Spanish a good work attitude will see you in employment pretty quickly. Unlike the UK, low-wage jobs provide a rather nice standard of living in much of the EU.

Main problem in the UK is fear of the different. That's institutional influence though which will pass in a few more years.

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Guest spp

You know there is something seriously wrong when the deposit required today (not including Help to slave) could get you a house 15-20 years ago.

Solid British 'family' creation must be well down over the last 10 years.

The DEBT is massive and domestic energy production is falling off a cliff! When does Atlas shrug?

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The DEBT is massive and domestic energy production is falling off a cliff! When does Atlas shrug?

When Ayn Rand claimed welfare

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People In Their 20's And 30's Can Either Put Lives On Hold, Accumulate Substantial Debt or EMIGRATE.

There - fixed.

Seriously, the EEA allows anyone to try out different places with very little inconvenience. Rental conditions are generally superior and costs lower. Simply because the UK finds itself in an economic hole of one particular flavour doesn't mean its the same everywhere.

There are always problems but those encountered in Germany, France, Holland or Spain may suit better than becoming an indentured slave to the UK banking industry or a beholden peon to the ever-growing UK landlord class.

Just remember that the grass is not always greener on the other side (of the channel).

Of the 4 countries that you name, 2 are seeing 100s of thousands of their young packing their bags and moving to the UK. I would suspect that a youngster moving from the UK to one of these countries would be very disappointed by that they find over there.

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My life is not on hold, consumption of the standard luxury/leisure goods well and truly is. No TV (telling me what I need), no car, no more cinema. I still socialise, £10 to go see a band with a dance floor, have a few jars, lots of people to dance with. Things that actually make me happy. God help the stock market if the masses cotton on.

Similar story here in terms of spending. Socialising consists of tea and cheap Jacob's Join type affairs round at friends houses. I've got pretty used to it, and you're right, it's really not so bad. I'm even eating better / healthier than I used to as I've learned to cook from scratch.

If and when business does pick up, I doubt very much I'l return to anything like the spending patterns I enjoyed prior to the crash.

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Guest unfunded_liability

Heads up on a one-off C4 documentary: Payday

This innovative, unique and hard-hitting performance documentary delves into the finances and wallets of four twenty-somethings who came of age in the financial crisis, a generation blighted by debt and overwhelmed by consumerism.

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...

The DEBT is massive and domestic energy production is falling off a cliff! When does Atlas shrug?

The Atlas imagined by Ayn Rand won't 'shrug' because no-one would notice, and because the ubermensch doing the best out of the system have, by definition, least to complain about.

Striking workers however, now that'd be a real problem...

Edited by (Blizzard)

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Just remember that the grass is not always greener on the other side (of the channel).

Of the 4 countries that you name, 2 are seeing 100s of thousands of their young packing their bags and moving to the UK. I would suspect that a youngster moving from the UK to one of these countries would be very disappointed by that they find over there.

Depends on what they're after I guess. The UK is great for student-style house-sharing whilst picking up some work experience in low-paid roles or running a small business. Can be harder in mainland Europe to get the first foot on the career ladder as the CV/education history often have to be just right. When it comes to settling down and having a family though the UK is comparatively pretty tough.

All the English guys I know in France/Germany (early 30's) have found jobs. One works in a French abattoir (no prior experience or language skills) – a manual role that has afforded him a large house with a lot of land 15mins drive from nearest largish town. His wife works in sales for a local factory but will likely quit when the first kid comes along. Horses for courses.

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Osborne's wet dream is for the young to monetize the phantom equity zugzwang mentions, on whatever repayment terms it takes- 30 year terms, ~zero rates, doesn't matter, so long as they sign on the line.

Spot on- like all ponzi schemes those in at the beginning can only exit with the gains is later cohorts come into the scheme to keep it going.

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