Three-quarters of young people admit heavy debts

THREE-QUARTERS of young people are struggling with debt, with one in five admitting they spend more than they earn each month, research shows.

About 74 per cent of people aged under 35 are in the red, owing more than £9,000 on average, while 12 per cent owe more than £20,000, according to the study.

Half of young people have run up debts on credit cards, while a further 33 per cent have a student loan, 28 per cent have a bank loan and 12 per cent owe money on store cards.

At the same time, 12 per cent also owe money to their parents and 4 per cent have borrowed cash from other relatives.

Young people's high level of borrowings are taking a toll on their finances, with the average under-35 shelling out £206 a month in debt repayments – their second-biggest outgoing after meeting their mortgage or rent – and 12 per cent paying out more than £500.

On average, young people spend twice as much on servicing their debt as they do on socialising and more than three times as much as they pay into a pension.

Four out of ten people say they are struggling financially, with 18 per cent admitting they spend more than they earn each month, while nearly half have less than £100 left at the end of the month.