New research has revealed that worryingly one in 10 Brits (11%) are accumulating an extra £500 worth of debt every month, prompting credit management company Lowell to conduct a nationwide survey 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 financial strain. Lowell has also discovered the extra measures people will use 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 are the main cause of debt for one in ten (11%) 35–44-year-olds, while a low income is the main cause of debt for 17% of 45–54-year-olds.
How are people financing their families outside of their work income?
Over 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, 17% are taking out loans, and 8% rely on government funding.
To make ends meet, 26% of Brits are now selling on second-hand sites such as eBay and Vinted, while 20% have even taken up an extra job to make ends meet.
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 of financial terms are the main causes of money problems. Education and communication often reduce these financial issues, so we hope our research inspires people to talk about their finances and take control of key areas impacting their money the most.”