Debt blights younger generations

worldtraveller

Of course many of these people were saving some money during the boom years as a buffer for the bad times. No? Go figure!

I posted about UK consumer debt on MSE 6 years ago, when it was around £1 trillion, saying that I thought it would be just the tip of the iceberg compared to what would happen over the next few years and that it was reflecting the spend now, don't care about later, attitude to life. I believe it's now around £1.5 trillion!

Going4TheDream

Graham_Devon wrote: »

It's still the people in debt. Not all of them obviously.

I'm not sure I get your point? I was making the point that the debt isn't neccesarily all due to iphones, holidays and wastage etc.

No not necessarily all, peoples circumstances change and this can lead them to being in debt, perhaps struggling to pay utility bills etc and maybe to make payments on a car loan or similar

However, you only have to read the DFW board to see how many people just spent and spent thousands on 4 or 5 cards and have two or three loans, having managed to accumulate £25k of debt, with nothing to show for it.

I call that living above your means and is the reason very many are in debt today.....

julieq

DFW is a self selecting board full of people with debt problems. So it's not representative. Just as a survey of clients of a debt management organisation (dare I say with a VI in talking up the problem?) isn't representative.

There isn't a largescale problem with personal debt in the UK (public debt is a different question entirely). Now I KNOW that that goes against received opinion, but the fact is that most people manage their debt perfectly well with low default rates, and it's not the case that an addiction to wide screen TVs (which aren't, incidentally, very expensive) is creating a debt crisis that is threatening our future. Lack of lending is arguably far more damaging to young people than is lending to young people. I don't know why the angry of Ruislip brigade are so determined to believe that behind every aspirant middle class door is a pile of designer carrier bags and unopened credit card bills, but although I know people who have debt problems, I know very many more who don't. I suspect it's about establishing a position in the prudence pecking order.

What is a bit more worrying is a TV advert I saw today from a pawnbroker business which is setting up very poor lending (high APR, low loan to value of security) on the basis of people not trusting banks. Ultimately that's a sort of tax against the unnecessarily indignant, and more casualties of the "hang a banker" paradigm.

wotsthat

Graham_Devon wrote: »

I'm not sure I get your point? I was making the point that the debt isn't neccesarily all due to iphones, holidays and wastage etc.

That's not the way your point was expressed. I thought you were trying to make the point that EVERYONE under 40 had hideous debt problems based on a survey of people who had sought help with their debts.

Graham_Devon wrote: »

Either way, it seems the younger generation has a rather large debt issue.

Maybe but not based on the evidence presented.

setmefree2

MSE did an article on this report.

http://www.moneysavingexpert.com/news/mortgages/2011/11/rise-in-mortgage-debt-forecast?utm_source=forum&utm_medium=sidebar&utm_campaign=box

It's funny but they seem to have missed this bit.

Higher student debts and lengthier student loan repayments will make it even harder for young households to save, invest or acquire other assets. Total student debt is expected to grow to £153bn in real terms by 2031, with loan repayments amounting to nearly £7bn a year.
The CCCS says this will leave younger generations unprotected should they suffer a fall in income.

http://www.guardian.co.uk/money/2011/nov/02/debt-younger-generation-buying-home?newsfeed=true


From the actual report

KEY FINDINGS

Student loans will also impact on the ability of
younger households to acquire wealth. There
are nearly 3.2 million student loans in place with
total debt outstanding amounting to £35 billion,
an increase of £13.25 billion over the previous
three years. Total student debt outstanding is
expected to grow to £153 billion in real terms
by 2031, with loan repayments amounting
to nearly £7 billion a year. With student loan
repayments reducing available income, future
generations will find it difficult to save or invest
in pensions until they are older, which will
impact considerably on their quality of life when
they reach retirement age (page 13).

http://www.cccs.co.uk/Portals/0/Documents/media/reports/additionalreports/Report_Debt_and_the_generations.pdf

I've no idea why MSE would have missed that bit? *Thinks*

FTBFun

Graham - why is the title of the article "Debt blights younger generation's chances of buying a home" but you've only used the first 4 words?

Graham_Devon

FTBFun wrote: »

Graham - why is the title of the article "Debt blights younger generation's chances of buying a home" but you've only used the first 4 words?

Have you really got nothing better to do other than to pick me up on this?

Because debt has a larger impact than just buy a home.

FTBFun

Graham_Devon wrote: »

Have you really got nothing better to do other than to pick me up on this?

Because debt has a larger impact than just buy a home.

I'd wager it changes the focus of your thread somewhat.

I'll ignore the crack from the person with 38,000+ posts.

wintersunshine

julieq wrote: »

There isn't a largescale problem with personal debt in the UK (public debt is a different question entirely). Now I KNOW that that goes against received opinion, but the fact is that most people manage their debt perfectly well with low default rates, and it's not the case that an addiction to wide screen TVs (which aren't, incidentally, very expensive) is creating a debt crisis that is threatening our future. Lack of lending is arguably far more damaging to young people than is lending to young people. I don't know why the angry of Ruislip brigade are so determined to believe that behind every aspirant middle class door is a pile of designer carrier bags and unopened credit card bills, but although I know people who have debt problems, I know very many more who don't. I suspect it's about establishing a position in the prudence pecking order.

So why are nearly all UK banks nationaized then?

Linton

Wintersunshine - why are most UK banks nationalised if it wasnt UK personal debt....

Nothing to do with UK personal debt. AIUI it was mainly due to:
1) investing in poor foreign assets (US mortgages, sovereign debt etc)
2) high dependency on cheap short term cash from the global credit market (Northern Rock in particular)
3) large scale investment in commercial property (HBOS)
4) takeover of other poorly performing banks (lloyds,RBS)

As julieq says the UK public as a whole appears able to manage its debts and hasnt caused major problems for the banks.