Recent figures provided by PricewaterhouseCoopers show that ‘unsecured’ consumer debt rose 9% during 2014 –to nearly £10 000 per household, an all-time high. http://pwc.blogs.com/press_room/2015/03/pwc-uk-unsecured-debt-set-to-rise-to-nearly-10000-per-household-by-the-end-of-2016.html
Though £4 billion of the increase came from credit card spending, £9 billion (around 46% of the increase) came from student borrowing, with PwC estimating graduates who started courses after 2012 will owe an average of £40 000 to £50 000. Student loan repayments are linked to salary levels –currently there’s a £21 000 threshold and because many university leavers will never earn graduate salaries, some estimates suggest that up to 40% of this debt will never be fully paid off.
Nevertheless, while these long term debts affect future borrowing potential and the chances of getting a mortgage, a 2014 analysis by Citizens Advice showed more young people turning to pay day lenders to finance their immediate expenditure (this accounted for 62% of the ‘high-interest’ credit…
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