Thousands of young Britons fear they have fallen into a ‘debt trap’ that could cause them trouble for the next ten years, according to the latest report from Birmingham Midshires ‘saving Britain’ campaign.

Concerns about debt now eclipse worries about home buying in the future - the biggest cause of anxiety for young people in last year’s study.

According to the Birmingham Midshires report:

• Almost one in four 20-somethings (24%) fear they have fallen into a ‘debt trap’ that could cause them trouble for the next ten years.
• The number of people in their twenties who have financial concerns (about a range of issues) for the future has risen from 72 per cent in April 2002, to 83 per cent in 2003 – a rise of 11 percentage points.
• Debt is also the biggest worry for one in four sixteen to nineteen year olds (25%), supporting a recent report from the NUS, which claimed 85% of young people are put off applying for university because of the potential debts involved.

The findings follow news recently from the Consumer Credit Counselling Service (CCCS), which showed that single men, aged between 25 and 39, have average unsecured debts of nearly £14,910, while single women of the same age have £11,416.

Birmingham Midshires’ ‘saving Britain’ campaign is an ongoing study into the issues influencing consumers in the savings arena. It aims to raise public awareness of key financial issues and to help Britons manage their money better.

Birmingham Midshires asked a GB representative sample of 1,000 people what personal financial issues would cause them most concern over the next 10 years.

Key findings show:

• Savings Crisis
  Britons’ biggest concern for the future is a lack of savings – 23 per cent say it is their biggest worry for the future - leaving them vulnerable to financial emergencies, hidden costs and sudden economic changes. However, the issue is of most concern to people in their thirties (30%) – suggesting many young people are unable to save, because the debt burden in their twenties creates a shortfall later in life.
• Property Ladder
  Getting a foot on the property ladder was the biggest future concern for young Britons in April 2002, when 25 per cent of 20-somethings claimed it would have the biggest impact on their finances over the next ten years. Despite the average age of a first time buyer standing at 34 years old, with property price growth slowing, less than one in ten (9%) now claim they are worried about property prices.
• Early retirement?
  For many people in their forties and fifties, most believe a lack of savings is causing the most alarm (26% and 29% respectively) – perhaps as many realise the full extent of their savings gap for retirement. Coupled with this worry, is the prospect of working into their seventies (14% and 12% respectively) – as many realise time is running out if they are to make sufficient provisions for old age.
• Sweet Sixty
  It would seem young Britons have a long time to wait before they achieve financial bliss. The report reveals it is not until we reach our sixties that money worries subside – with only one in two 60-somethings (52%) claiming they have future financial concerns. Of people in their 60s, one in five (21%) are concerned by a lack of savings for the future and one in ten (13%) about their ability to afford healthcare over the next ten years.

Tim Hague, Head of Savings and Investment Marketing at Birmingham Midshires said:

“Many young Britons risk falling into a debt trap during their twenties and thirties. Low interest rates have acted as an incentive for people to borrow, while making many saving products less appealing when looking at price alone.”

“Debt is not a problem provided it is well managed, but debt repayment prevents young people from saving money for their future. For example, we see from the report that people in their 30’s and 40’s have concerns about their future savings – which owes much to the debts we accumulate when we’re younger.”

“It is important for people to regularly review their spending and debts, and to save where possible - because the implications of saving too little and too late are serious.”