Research from Neyber has found, carried out among 10,000 UK employees, found that an alarming 70 per cent of people under-34 need to regularly borrow either to pay their monthly bills or deal with day-to-day living expenses.
More worrying, are the dangerous forms of lending used. 33 per cent of 25-34-year olds are using credit cards for day-to-day borrowing – higher than any other age group. And 8 per cent of 18-24-year olds use a payday lender. One in 20 young people have resorted to a loan shark.
One of the reasons for this regular borrowing may be that more people are working in jobs with a fluctuating income. Sixty-eight per cent of 18-24-year-olds said their income changes each month.
The combination of regular borrowing and uncertain incomes has led to many young people feeling stressed. Sixteen per cent of 18-24-year-olds said that their finances were out of control, while 20 per cent of 25-34-year-olds said they were only just coping.
Heidi Allan, head of employee wellbeing at Neyber said: “Financial worries can lead to sleeplessness, stress and even depression. Clearly, our research demonstrates that young people in Britain are not coping and are having to borrow just to get by. More needs to be done to support people, whether that’s providing better financial education in schools, working with employers to offer their young staff financial education or even providing debt support and guidance. If we don’t act now, we will see young people in Britain spiralling into debt they’re unable to repay.”
Top tips for managing money
Neyber’s Heidi Allan has identified top tips for people looking to reduce money stress.
- Use technology to help manage money: contactless pre-pay wristbands mean that you can’t spend more than you plan to, and will stop you accidentally slipping into your overdraft.
- Be open and honest and talk about money: it’s all too easy to feel pressured into spending lots of money socialising, but if finances are tight why not suggest dinner parties instead of restaurants or house parties instead of expensive night’s out.
- Be wary of deals that sound too good to be true: never enter into a financial agreement that you don’t fully understand. If it sounds too good to be true, it probably is!
- Avoid impulse buys: Set budgets before you hit the shops and always ask yourself if you really need or want the item you are about to buy. Don’t spend on impulse or to ‘keep up with your mates’. If you’re unsure, ask the shop assistant to hold an item for an hour and see if you really still want it later.
- Educate yourself about different types of debt: Make sure that before you take on any debts – whether that’s credit cards or phone plans or even a mortgage – that you fully understand the terms and conditions. Some debts are better than others, so make you understand what you’ll need to repay and when and that you can really afford the credit.
Neyber’s full report can be found here.