Young Increasingly Face Stifling Debt, Citizens Advice Warns

[interestrateripoff]

http://www.bbc.co.uk/news/business-34346698

Young adults are increasingly facing "stifling" levels of debt after borrowing from banks, payday lenders and family members, a charity has said.

Citizens Advice said people aged 17 to 24 asked for advice on 102,296 debt issues in the last year, a 21% rise on the previous year.

It said young people were seeing falling debt carried on credit cards.

It suggested youngsters were moving to "formal loans" instead, creating more problems than student loans.

"A new generation of young people are starting out with stifling levels of debt," said Gillian Guy, chief executive of Citizens Advice.

"Many young people already face challenges getting on the career and housing ladders - doing this while saddled with huge unsecured debts make it an uphill struggle.

Luckily George is doing all he can to increase this debt on the government side each month. How lucky the young are.

[billybong]

How come it's taken them so long to spot it. At any rate they'll just be ignored - they must know that by now.

Edited September 24, 2015 by billybong

[Le Grande Fromage]

a young person and a credit card,they dont teach youngsters about money and debt, every purchase you make you only have to pay the minimum per month,slowly gettting more and more in debt,like smoking catch em young,but they do all seem to have the latest gadgets and clothes though

[Frugal Git]

The 'everything monthly' thing gets more and more insidious by the week.

Cars are on increasingly sold on leases (actually some offer very reasonable value...for now).

Music/tv/cinema - just get a monthly streaming plan/package/membership card.

Young people are more and more destined to a life of renting or a massive mortgage. Monthly.

Apple has decided to see the iphone itself, at least in the US on a rolling monthly payment plan that hooks people into a continuous upgrade cycle. For a phone that 80% of people use 20% of its power. Its just a bling item for them.

Now your student loan is just another tax on income. Easy monthly payments at source for your working life.

The debt to pay for all that will sneak up on ya when you're on a rubbish wage. First it's maxing the overdraft, then maybe a loan of the folks to get your rental desposit, then a pay day loan when the unforseen happens...and so on.

Edited September 24, 2015 by Frugal Git

[billybong]

For sure Citizens Advice will do a lot of good work but

https://

en.wikipedia.org/wiki/Citizens_Advice_Bureau

Funding

Both Citizens Advice and CAS are registered charities and are financed partly by the Department for Business, Innovation and Skills, although both organisations are completely independent of central government. Member bureaux also pay heavily-subsidised subscriptions for the services offered.

They often receive significant funding by local authorities, and local solicitors may agree to provide limited legal advice pro bono.

Funded by a government department as well as local authorities etc but then there's those words "completely independent of central government" - again.

So an organisation basically funded by government tells people that government policies are putting young people into massive debt - what is that all about apart from, that is, rubbing it in.

The bbc as well of course.

Edited September 25, 2015 by billybong

[Bland Unsight]

a young person and a credit card,they dont teach youngsters about money and debt, every purchase you make you only have to pay the minimum per month,slowly gettting more and more in debt,like smoking catch em young,but they do all seem to have the latest gadgets and clothes though

Didn't you borrow a ton of money you'll never pay back in order to compel some young people to rent from you? Or are your BTL loans on a repayment basis? (BTW even on the minimum payment, with a credit card, you are at least gradually repaying what you owe, unlike an interest-only buy-to-let 'mortgage'.)

[Guest eight]

Young people are more and more destined to a life of renting or a massive mortgage. Monthly.

Seen this advertised on the telly.

http://www.fabletics.co.uk/howitworks

Subscription sportswear.

[pipllman]

I do wonder how this plays out for the UK

It is quite easy these days to graduate with a degree that is of no use whatsoever (in terms of economic contribution potential) and a debt of £60k+

Where does the 21 year old go then? Surely at that age they should be unencumbered, enthusiastic, change the world types. Not tired and worried because they can't see their way to ever being free of debt.

Or does that become the new norm? Have the bankers 'won'? Have they got nearly everyone coming through their teens now accepting to be tied up to a perpetual debt with interest?

[Frugal Git]

Or does that become the new norm? Have the bankers 'won'? Have they got nearly everyone coming through their teens now accepting to be tied up to a perpetual debt with interest?

Yep - in the main. Most people think its still milk and honey post graduation, and they just need to get on the corporate and 'property' ladders. However its also pretty easy to wake up the smarter young people to reality. Did it myself this week. I don't know whether i did a good thing or a bad thing though - he's probably consigned to a life like mine now full of abnormal tax avoidance strategies and 3 day weeks. And computer games.

So maybe not so bad.

Edited September 25, 2015 by Frugal Git

[Frugal Git]

Seen this advertised on the telly.

http://www.fabletics.co.uk/howitworks

Subscription sportswear.

Brilliant! And totally unsuprising.

[Si1]

I do wonder how this plays out for the UK

It is quite easy these days to graduate with a degree that is of no use whatsoever (in terms of economic contribution potential) and a debt of £60k+

Where does the 21 year old go then? Surely at that age they should be unencumbered, enthusiastic, change the world types. Not tired and worried because they can't see their way to ever being free of debt.

Or does that become the new norm? Have the bankers 'won'? Have they got nearly everyone coming through their teens now accepting to be tied up to a perpetual debt with interest?

Further education colleges are delivering no frills degrees at £6000 per year including the option to take a break between 2nd and 3rd year to earn some money for a while and pay for it whilst you're doing it. They tie these degrees in closely with vocational qualifications, eg accountancy or IT networking or Admin pro quals. They limit contact time to 3 day weeks so students can live at home with mum and reasonably economically commute a fair distance to college and perhaps sofa surf the odd night.

Further education colleges are, I understand, expanding these courses at a rate of knots. They make a healthy profit on them and consider £6000 per student per year to be very profitable. They especially love it when they can provide subcontracted units for universities where they can charge the pro rata rate per unit of £9000 to the connected university, this is extra clear profit. And existing universities, from conversations I've had, seem to have trouble covering their costs on the higher £9000 rate.

As liveinhope had indicated, academics in universities are probably simply overpaid

Edited September 25, 2015 by Si1

[pipllman]

Appreciating that might be a better option

But when a £6k per year fee for education is that better option and looking at other things that the government willingly spends taxpayers money on, I am not convinced the economic priorities are correct

There is no doubt that universities could be organised more effectively / efficiently, but burdening the student for the ills of the system feels wrong to me

Edited September 25, 2015 by pipllman

[sikejsudjek]

Welcome to debt for life. Clearly the way to fix this is more debt, anything else would cause use to turn into Zimbabwe.

[canbuywontbuy]

http://www.bbc.co.uk/news/business-34346698

Luckily George is doing all he can to increase this debt on the government side each month. How lucky the young are.

Currently the government are paying around £1.2Bn per week in interest alone to pay off the national debt - based on the debt being £1.5Trillion.

What will it be in 5 years' time? It will be more, for sure. Will we get to £2Bn per week, or £100Bn per year - in interest alone to pay off the national debt?

This is in a time where borrowing has never been cheaper. What if the government's borrowing rates go up?

[Si1]

Appreciating that might be a better option

But when a £6k per year fee for education is that better option and looking at other things that the government willingly spends taxpayers money on, I am not convinced the economic priorities are correct

There is no doubt that universities could be organised more effectively / efficiently, but burdening the student for the ills of the system feels wrong to me

Agreed

Whilst reducing inheritance tax. Ridiculous.

[Frick]

There should be a flat number of stipends for the best. Such as to cover around the usual '10-15% of population should have higher education'. Or, in other words, those smart enough to benefit the society with their degrees.

Anyone else is free to pay full fee, if they wish to study. Could be even higher than today to encourage them to aim for other jobs for which currently there is demand. The entire idea from Blair's times that 50% or more needs to go to uni is borderline mad and results in a ton of unis producing degrees worth less than the paper they are printed on.

[canbuywontbuy]

Seen this advertised on the telly.

http://www.fabletics.co.uk/howitworks

Subscription sportswear.

This is completely based on the idea that you will not check your statements and simply forget, or cancel a few months after realising you don't need this "service" - it's how so much business is done these days - business models are based on people forgetting. Set and forget.

[Si1]

There should be a flat number of stipends for the best. Such as to cover around the usual '10-15% of population should have higher education'. Or, in other words, those smart enough to benefit the society with their degrees.

I think that would just be gamed by the rich

Edited September 25, 2015 by Si1

[pipllman]

And it depends on the alternative

If the choice is between paying someone to study or paying them to 'jobseek' even if at a lower rate of pay, maybe some study is valuable enough to be funded by the taxpayer

[Frick]

I think that would just be gamed by the rich

How would that be gamed? You simply provide an allocated number of free spots on unis for the kids scoring best countrywide. Possibly divided over different areas needed by the country (majority right now for engineering, medicine and IT)

[Si1]

How would that be gamed? You simply provide an allocated number of free spots on unis for the kids scoring best countrywide. Possibly divided over different areas needed by the country (majority right now for engineering, medicine and IT)

Rich kids get better A levels then poor kids irrespective of ability. All sorts of social factors contribute to this. Edited September 25, 2015 by Si1

[Frick]

Rich kids get better a levels then poor kids irrespective of ability. All sorts of social factors contribute to this.

Happens. You can never provide a 100% fair system. You could work on improving lower level education to equalize the chances but you will never be able to make the game fair. Because rich parents can vastly contribute for the child's growth and education outside of the public system.

It's still better than the current one where poor kids leave the system with crippling debt from a bad uni.

[spyguy]

Maybe this is part of Haldane's plan to abolish cash? At least for those under 40.

They can get jobs at a government factory, where they can work and get food. A bowl of rice should suffice.

There's a very North Korea feel about the whole thing. Kim supreme leader (over 50), oppressed peasant (under 40).

[Si1]

Happens. You can never provide a 100% fair system. You could work on improving lower level education to equalize the chances but you will never be able to make the game fair. Because rich parents can vastly contribute for the child's growth and education outside of the public system.

It's still better than the current one where poor kids leave the system with crippling debt from a bad uni.

I'm not sure that's poor kids. They either don't go to any university, put off by the costs, or find an economical (ish) route as stated above, or even take an existing stipend at a traditional university if on the very top level of ability and know the system.

It's middle income families' kids getting screwed by student debt, trying to live the dream.

Edited September 25, 2015 by Si1

[Snugglybear]

I'm not sure that's poor kids. They either don't go to any university, put off by the costs, or find an economical (ish) route as stated above, or even take an existing stipend at a traditional university if on the very top level of ability and know the system.

It's middle income families' kids getting screwed by student debt, trying to live the dream.

Not for much longer. The maintenance grant (currently £3,387 a year for students from families with annual incomes of £25,000 or less) is being turned into a loan from September 2016.

And according to the ScholarshipSearch website, there are 4056 scholarships available in the UK (that's at pre-university, undergraduate and graduate levels combined). Remembering that there are just shy of 1.2 million UK students on undergraduate courses alone.

There's the National Scholarship Programme, for students from families with annual incomes of £25,000 or less, but that's only worth £1,000 a year. Some help, but not much.