FCA’s Andrew Bailey: Debt problems have gotten worse for young people

Ryan Bembridge

October 16, 2017

 

FCA chief executive Andrew Bailey has warned that young people are increasingly falling into problems with debt in order to pay for essential living costs.

Speaking to the BBC, he blamed a generational shift in wealth and income – with lower levels of real income and asset ownership like houses – for making things worse.

Young people struggling to find a viable route to home ownership

Bailey (pictured) said: “There is a pronounced build-up of indebtedness amongst the younger age group.

“We should not think this is reckless borrowing, this is directed at essential living costs. It is not credit in the classic sense; it is [about] the affordability of basic living in many cases.”

Last month debt charity Citizens Advice said the number of under-25s seeking help with high cost credit has risen by a third (34%) in the past two years.

What is more two-thirds (64%) of people contacting debt charity StepChange for help in the first half of this year were under 40, up from just over half (53%) in 2013.

Bailey added: “There are particular concentrations [of debt] in society, and those concentrations are particularly exposed to some of the forms and practices of high cost debt which we are currently looking at very closely because there are things in there that we don’t like.

“There has been a clear shift in the generational pattern of wealth and income, and that translates into a greater indebtedness at a younger age.

“That reflects lower levels of real income, lower levels of asset ownership. There are quite different generational experiences.”

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