New research has revealed that worryingly one in ten Brits (11%) are currently accumulating an extra £500 worth of debt every month, prompting credit management company Lowell to conduct a nationwide survey¹ to see the main causes of debt for each age group and family member.
From misunderstanding financial terms, to credit card debt, poor money management, student debt and more, different generations are experiencing the financial strain, and Lowell has also found out the extra measures people are going to for further financial support.
What are the main causes of debt for different generations of the family?
Over a third (36%) of 18–24-year-olds claim that their main cause of debt is poor money management, whereas the 65+ age group blame the cost-of-living crisis for their money problems (16%).
Misunderstanding financial terms is one of the key money issues for younger people (14%), whereas credit cards are an issue for 25–34-year-olds (25%). The costs involved with having children is a main cause of debt for one in ten (11%) 35-44-year-olds, whilst a low income is the main cause for debt for 17% of 45-54-year-olds.
What is your main cause for debt and money problems in general (excluding any mortgages)? 18 – 2425 – 3435 – 4445 – 5455 – 6465+Misunderstanding financial terms14%14%12%7%4%5%Poor money management36%23%24%18%18%13%Holidays24%17%15%9%4%7%Taking on credit / not keeping up to payments14%20%22%11%10%8%Credit card22%25%20%21%17%14%Cost of living crisis31%26%22%23%19%16%Energy crisis18%12%12%15%12%13%Low income24%23%14%17%13%12%Job loss20%14%11%7%8%6%Student debt14%12%8%4%2%2%Unexpected expenses27%16%17%17%17%16%Children6%5%11%7%6%5%Pets5%4%4%3%3%1%Relationship breakdown8%3%3%8%6%6%
How are people financing their families outside of their work income?
More than a third of Brits (37%) are dipping into their savings to ensure their family is financially supported this year. Almost a quarter (22%) of Brits are accumulating further debt and credit by extending overdrafts, while 17% are taking out loans and a further 8% are relying on government funding.
To make ends meet, 26% of Brits are now selling on second-hand sites such as eBay and Vinted, whilst 20% have even taken up an extra job to make ends meet.
Aside from your work income, are you financing your family through any of the following means?PercentageSavings37%Selling on second hand sites like eBay and Vinted26%Extending overdrafts22%A second job20%Loans17%Government funding8%
For more information about the findings and for further debt guidance, please visit: https://www.lowell.co.uk/help-and-support/debt-guidance/overdrafts-and-debt-lowell/
John Pears, UK Managing Director of Lowell UK said “As the cost-of-living crisis continues to have a huge impact on many households, and in such an intense financial period, we want to ensure that people know where to find financial guidance and how to live money-consciously, and educate other members of their family on how to do so too.
Our report shows that beyond the cost-of-living crisis for many generations of the family credit cards, poor money management and misunderstanding financial terms are their main causes of money problems. These financial issues can often be reduced by education and communication, so we hope our research inspires people to talk about their finances, and start to take control of key areas that are impacting their money the most.”
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