The average young adult in the West Midlands has more than £7,000 of debt, new figures have revealed.

Data from the Office for National Statistics has shown that 16-34 year olds in our region have a combined personal debt of £3.7 billion.

As well as student loans, this includes other loans, credit card debts and overdrawn current accounts - although it excludes any mortgage debt.

The combined debt works out at £7,300 a head - much more than the amount this age group owed just a few years ago.

Between 2012 and 2014, 16-34 year olds in our region had a combined debt of £2.4 billion, or £5,100 each on average.

Why are young people in so much debt?

In reality, some people owe much more than others, so it’s not the case that every 16-34 year old in the West Midlands is so far in the red.

In fact, a small number of people owing substantially more than average appears to be skewing the figure upwards.

The median debt is closer to £2,300 - still a substantial figure.

credit cards
Credit cards

David Rodger, CEO of the Debt Advice Foundation said: “It’s not surprising to hear these statistics because young people have lower than average incomes and often less stable employment.

“Housing costs can also be felt even more acutely by young people as they account for a higher proportion of their basic income.

“They’ve also had less time to generate savings, which means that they are much more vulnerable to income shocks, such as job loss or an unexpected bill.

“If anyone is struggling with debt, they should firstly speak to someone who can help create a clear picture of their incomings, outgoings and debts.

“A debt advice charity will be able to do this, as well as go through step-by-step what options are available to try and clear the debts.”

What about older people?

Generally, older people have less personal debt than young adults.

In the West Midlands, 35-44 year olds owe £5,500 on average, 45-54 year olds have £4,100 of debt, 55-64 year olds owe £4,600, and people aged 65 and over are £4,100 in the red.

Experts have warned the debt divide between old and young is only getting worse in our current economic climate.

Peter Tutton, Head of Policy at StepChange Debt Charity said: “There has been a notable increase over recent years in the proportion of young people seeking debt advice from StepChange Debt Charity.

“Around one in seven of our new clients last year was under 25, and nearly two thirds of clients were under 40 – a 10 per cent rise on the proportion of younger clients just five years ago.

“Young people today are less well off than older generations were at the same age, with a fall in real wages, a rise in insecure gig-economy working, and high housing costs making it harder for them to meet their day-to-day financial commitments without turning to borrowing.

“As owning a property is unattainable to many young people, we are also seeing an increased number of renters contacting us for support with their problem debt, with four out of five of our clients renting.

“These figures underline the importance of regulation to ensure firms offer credit products that are affordable and right for customers, so they are prevented from inadvertently ending up in persistent problem debt, while consumers should seek free debt advice if struggling to keep up with credit commitments.”

A heavy burden to carry?

The extent to which this debt is a burden depends on several factors, such as a person’s income, their attitudes towards money and their general financial savviness.

Because of this, in the Wealth and Assets Survey - where these figures are from - the ONS also ask people how much they find their financial debt to be a burden.

More than half of people with personal debt said it was not a problem at all - although 31% said it was somewhat of a burden, and 17% said it was a heavy burden.

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