New insolvency statistics contain a stark warning for young people heading to university this September.
With high tuition fees, limited government funding and easy access to credit facilities like overdrafts and credit cards, new students often rack up debt in the first few years of university.
Many students are able to pay these debts off once they enter employment, but new data shows that more young people are struggling to cope with their debt and are turning to individual insolvency solutions.
The rate of young people (aged between 18 and 24) entering personal insolvency rose by 110% between 2015 and 2018. The total number of under 25s entering insolvency also increased by 104%.
This relative increase is significantly higher than for other age groups. In the same time period, the rate of personal insolvencies for people of all ages also grew, but more gradually at 42%. The total number of cases for all age groups rose by 45%.
Tom Fox, Licensed Insolvency Practitioner at Umbrella Insolvency, said: “This headline increase in the young persons’ insolvency rate sounds alarming, but it’s important we look at the broader context. While the total number of insolvencies in the 18-24 group has increased by more than 100% over three years, under 25s still only accounted for 6% of the total insolvencies in 2018. The group most at risk of becoming insolvent remains those aged 25 to 34. This age group accounted for 31.4% of the total insolvencies in 2018.
“It’s important that younger people learn to be financially literate early on, otherwise they could be haunted by debt problems later in life.”
For more information about personal insolvency solutions, speak to a member of the team today. Call: 0800 611 8888.