Consumers are building up large levels of debt at a much younger age, a report says
Young Britons are being saddled with debt but are unlikely to build up assets in the same way as previous generations, a report commissioned by debt advice charity the Consumer Credit Counselling Service has found.
The research, conducted by the Financial Inclusion Centre think-tank, found that more than one million households containing 18- to 39-year-olds are struggling to cope and a further 893,000 are "at risk" of falling into difficulty.
The Debt and the Generations report said that while debt levels currently peak around the time people turn 40, this situation could be changing, with consumers building up large levels of money owed at a much younger age.
Almost three-quarters of people aged 18 to 39 have unsecured debts, compared with around 60% of those in the 40 to 54 age group.
The report suggested: "This may be because younger consumers tend to be less financially aware and more inclined to rely on credit to make ends meet."
Younger households are more likely to be behind with their debts, with those in the 25 to 39 age group more than twice as likely to be in arrears or insolvency as those in the 55-plus group - 15% compared with 7%.
The report said that rising house prices and reducing incomes made it unlikely that younger households will be able to acquire assets in the same way as their parents and grandparents.
Between 1997 and 2007 the typical house price grew from around 2.3 times to nearly 5.5 times gross earnings, meaning first-time buyers are increasingly reliant on the "bank of mum and dad".
Last year 45% of all first-time buyers received financial help, compared with a fifth in 2005, the report said.
For first-time buyers aged under 30, 84% need help with their finances in order to buy.
