More than two-thirds of young people have taken on debt to cope with the rising cost of living, according to a new study.
According to a new report from MoneyTransfers, the average person in debt is between 18 and 34 years old. The most common types of debt she incurs are personal loans and payday loans.
“Life is getting unbearable for young people in Britain,” said MoneyTransfers chief executive Jonathan Merry.
Read more: BoE rate hike: P2P chiefs call for diversification
“The cost of living is rising, but wages are stagnating. This creates a perfect storm for debt. What’s even more worrying is that many young people are turning to high-interest payday loans to make ends meet.
“It could have a devastating impact on their financial future.”
Merry warned that young people risked losing mortgage applications in the future if they were unable to keep up with personal loan repayments and see their credit scores drop.
The MoneyTransfers report follows a similar survey by The Mortgage Lender, which found that young people are increasingly addicted to debt. It also found that two-thirds of young people took on new debt to cope with the cost of living crisis.
Read more: P2P platforms more competitive as interest rates soar