People in their 20s and 30s can either put their lives on hold or accumulate substantial debt, a new poll has indicated.
The Populus poll, commissioned by the ‘Demos think tank’, suggest that young people are overwhelmingly bearing the burden of increasing levels of debt, while the older generation are ‘doing better’ in escaping the squeeze in incomes.
The 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 (IFS) 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 also 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.
Forty-five per cent of those aged 18 to 24 and 56% of those aged 25 to 34 owe more than that amount, the poll discovered.
And, worryingly, 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, while ‘unexpected expenses’ were the reason for 28% and 35% of the two age groups.
Paying for the basics was the reason given for debt by 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.
“If, as the Prime Minister tells us, 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.”