The young are using credit responsibly — with the lowest levels of credit card debt of any age group. Whilst young people have the highest debt to income ratio — half of this is low cost student loans, so the cost of servicing their debt is lower. This means that those in their 20s actually spend the same proportion of their incomes on debt interest as those in their 30s and 40s.
This is one of the main findings from Alliance & Leicester’s latest Borrowing Monitor — a survey that looks at patterns of debt in the UK showing the difference by age and region.
Alliance & Leicester’s Borrowing Thermometer shows that base rates would have to reach 8.5 per cent before the UK returned to the debt crunch of 1990 which led to thousands of homeowners losing their homes.
