Young adults aged between 18 and 34 will be the hardest hit as the UK slides into recession, according to a report by the Chartered Insurance Institute (CII) and independent thinktank Reform.
Based on their findings, they said that over-regulation and the outdated attitudes among financial services companies have rendered this group unable to handle an economic downturn, due to the lack of necessary coping skills.
The study claims that banks and financial services offer advice and products that are ill-suited to the young people, and that these companies are out of touch. They also say that government-sponsored regulation had overprotected young adults into an irresponsible state and pushed up the costs of financial advice.
Research found that approximately half of those questioned in the 18 – 34 category had debts of up to £10,000, while twenty per cent owed more than that.
Almost a third had no savings and 60% stated that they would like to save more and borrow less.
Reform’s Lucy Parsons said: “We are living in ‘broke Britain’ not broken Britain, and my generation is suffering.
“We are potentially more capable of managing our money than previous generations, but we have been let down by the financial establishment and the government.”
Chiltern’s Nathan Gladwell says: “Unless financial companies can connect with this age group, and the government reduces regulation, the UK faces the possibility of a whole generation living in poverty at retirement age.
“As the credit crunch bites those who have already been allowed to overstretch themselves, they will struggle to pay off debts or find lenders unwilling to help them on to the housing ladder.
“Quite often, people don’t think there’s a problem if they are keeping up payments on their commitments by using other credit to do so, until it’s too late and the credit runs dry. An indicator that you may be struggling is by using credit cards to pay for petrol, food or essentials each month, or for cash advances.
“If this sounds like you, it would certainly be worth contacting an impartial company like Chiltern sooner rather than later, as there are many ways to deal with debts at this stage.”
