Standard Life paints bleak debt picture
A report commissioned by Standard Life paints a grim portrait of the rising debt problem in the UK.
The report confirms borrowing as the most common among people aged between 20 and 50 and reveals that a core minority of young adults see debt consolidation and insolvency as easy ways out of the debt problem.
Parents too often feel pressured to fund lifestyles and provide for their children’s needs. Housing equity, especially among consumers in or approaching the family years, is viewed by many as the solution to all future financial needs.
Anne Gunther, chief executive of Standard Life Bank, said: “Consumer attitudes to credit and borrowing have changed dramatically over the last few years. We are not only seeing people trying to keep ‘up with the Joneses’ but also aspiring to a lifestyle more akin to A-list celebrities.
“Credit is not only freely available but considered a way of financing lifestyles rather than reflecting need. Rising debt is also becoming a key issue for younger people from primarily affluent backgrounds.
“A seismic change in mindset is required to begin to unwind the chronic debt issues we face in the UK. Pinning your hopes on housing equity or thinking that insolvency is the easy way out of debt is financial suicide.”
The report makes several policy recommendations including reinforcing and strengthening current financial education and capability initiatives and using tax policy proactively to provide greater incentives for people to make provision for their futures.