Yahoo Finance 'Debt epidemic' gripping young people sees many borrowing cash every month
Half of young women have to borrow money or skip meals to get through each month.
And a quarter of all women and men aged under 30 say they are permanently in debt, facing a daily struggle amid rising prices and stagnating wages.
A survey of 4,000 millennials shows that 51% of young women and 45% of young men regularly use credit to stretch their finances until payday.
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The results show an epidemic of debt among young people, with many only being able to make it to the end of the month by relying on overdrafts, credit cards, payday lenders and the bank of mum and dad.
A quarter of both young women and young men said their level of debt had got worse in the past year.
The survey of 18-30 year-olds was carried out by the Young Women’s Trust, a charity which provides services for women aged 16-30 “trapped by low or no pay and facing a life of poverty”.
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Chief executive Dr Carole Easton said: “Young people tell us they want to work hard and be financially independent but as prices rise and wages remain low, more and more are struggling.
“Young women are more likely to be stuck on low pay and on zero hours contracts, which mean they don’t know how many hours they will work each month and whether they will earn enough to pay their bills.
“It can be particularly hard for young mums; in many cases, low pay means an hour’s childcare can cost more than an hour’s wages. As a result, many are failing to make ends meet and are falling into debt.”
There was little hope for the future, too, said the charity; just 39% of young people expect to be debt-free by the time they are 40.
As the Bank of England gears up to raise interest rates in the near future, the worry is many young people will be pushed further into debt.
The report was published on the same day that the Resolution Foundation think-tank revealed young people in Britain are spending three times more on housing than their grandparents did.
Those now in their 70s and 80s spent just 7% of their annual income on housing at the age of 30, it says. The baby-boom generation – now in its 50s and 60s – spent 17% of income at the same age.
However, millennials – those now in their 20s and 30s – spend 23% of everything they earn on housing costs.
“Britain’s housing catastrophe has been 50 years in the making, but while its effects are widespread, it is millennials who are truly at the sharp end,” said Lindsay Judge, one of the report’s authors.
