CCCS Consumer debt and money report

New research commissioned by the Consumer Credit Counselling Service (CCCS) suggests young people are being disproportionately affected by the deteriorating state of the economy.  

The CCCSConsumer Debt and Money Report Q1 2012, produced by the Centre for Economics and Business Research (Cebr), identifies a generation of ‘baby-busters’ – people born in the 1980s to the baby-boomers but facing a range of problems limiting their financial prospects. 

Unemployment

• Under 25s now make up the largest group of unemployed people in the UK. One in four men and one in five women aged under 25 are out of work – with increasing long term consequences. Among young people helped by CCCS, around 45 percent are unemployed compared to 30 percent of all debt advice clients.

Stagnating incomes, struggling with debt

• In the first quarter of 2012, CCCS provided debt counselling to 3,600 people under the age of 25, or around 40 people every day. Unsecured debt levels are relatively low, averaging £5,800, but low incomes and high unemployment make repayment more difficult – average monthly take-home pay is £980, £400 less than the average client.

Tuition fees

• With two out of five young people aged 18-22 attending university, tuition fees will add roughly £9,500 to the debt burden of the average British citizen of future generations, meaning less money available for savings and less of a cushion against debt distress.

For the population as a whole, the CCCS Interest Burden Index shows debt servicing costs are broadly stable. The typical household paid £197 a month to service debts, more than a quarter of average household income after essential living costs. 

The report is based on data compiled from CCCS activities – more than 1,000 people get help from the charity to resolve debt problems every day.