Young struggling most with priority debts

12 March, 2013 

Young adults are struggling with priority debts more than older generations according to StepChange Debt Charity. Over twenty thousand (22,262) adults under the age of 25 sought help from the charity last year, and a larger share of that age group were in council tax, gas, electricity and water arrears than any other age group.

The charity is very concerned about these young debtors as the consequences of not paying ‘priority debts’ such as council tax and utility bills is more serious than consumer debts such as credit cards. It points out that non-payment of council tax can even lead to imprisonment. 

Council tax

Twenty-eight percent of those seeking help from the charity under the age of 25 last year had council tax arrears, the average of which was £534. This compares to 19 percent for those aged 25 to 39, 18 percent for those aged 40 to 59 and 11 percent for those aged 60 and over.

Gas

Fourteen percent of those seeking help from the charity under the age of 25 were in arrears on their gas bills, the average of which was £338.  This compares to 12 percent for those aged 25 to 39, 10 percent for those aged 40 to 59 and 7 percent for those aged 60 and over.

Electricity

Fifteen percent of those seeking help from the charity under the age of 25 last year were in arrears on their electricity bills, the average of which was £339. This compares to 12 percent for those aged 25 to 39, 11 percent for those aged 40 to 59 and seven percent for those aged 60 and over.

Water

Twenty-five percent of those seeking help from the charity under the age of 25 last year were in arrears on their water bills, the average of which was £323.  This compares to 17 percent for those aged 25 to 39, 14 percent for those aged 40 to 59 and eight percent for those aged 60 and over.

Commenting on the findings, Siobhan Freegard, founder of the UK’s largest parenting site Netmums said:

“It used to be said that ‘we’d never had it so good’ – but youngsters these days may well be justified in feeling they’ve never had it so hard in modern times.

“Spiralling bills for every essential from food to energy costs to childcare coupled with wages falling in real terms have made it almost impossible for youngsters to become independent, save and begin their adult lives.

“We hear daily on the Netmums forum from young families who cannot afford to move out of their parent’s home into rented accommodation, let alone buy their own place. And those who do try often become mired down in debt.

“As StepChange’s study shows, we are creating a ticking timebomb of debt which may well prevent a generation from moving forward with their plans for adulthood.”

Delroy Corinaldi, external affairs director at StepChange Debt Charity added: 

“Council tax and utility bills are classed as priority debts for a good reason, because the consequences of not paying them are far more serious than other types of debt such as credit cards and personal loans.

“It is therefore particularly worrying that young people are struggling with these type of debts more than any other age group. It is crucial that the young are given the support they need to keep up with these essential payments.”

For more information see our infographic.