At a time when total mortgage advances have jumped by 19.5% in March to £24.5bn, this younger generation has significant concerns about meeting their home loan payments - with 38 per cent concerned about being unable to pay their mortgage in the next three months - according to the latest quarterly debt report from the CPP Group Plc, the international provider of consumer assistance services.
With recent figures revealing the average student leaves higher education owing £12,069 this generation is already in the spotlight and this latest report will only fuel concern that they are taking on more than they can afford.
In the second quarterly debt report for 2004, the CPP Group asked a representative sample of 2,000 people what they most feared not being able to pay in the next three months. The debt report has run since Spring 2002.
Top financial worries for young people (aged between 25 and 34):
1. Mortgage (38%)
2. Council tax (17%)
3. Utility bills (14%)
4. Main credit card (11%)
5. Money lent to me by friends/family (10%)
6. Personal loan (5%)
7. Bank overdraft (3%)
8. Main store card (2%)
Further findings:
· Across all age groups mortgage repayments are still cause for concern, though not to the same degree as younger people - 31 per cent of people have a concern over meeting their mortgage repayments - this figure is slightly down from the previous report in January, when the figure was 32 per cent.
· Council tax bills continue to cause concern amongst all age groups - 25 per cent of people fear being unable to pay these bills in the next three months - up by 5 per cent since last quarter when the figure was 20 per cent. It appears that people are beginning to feel the brunt of the recent rises, with women in particular becoming far more concerned - in January 21 per cent of women felt unable to repay - this figure has since jumped to 32 per cent.
· Similarly, the older generation's (those aged 55 and over) anxiety over paying council tax bills continues to rise - up 7 per cent from 44 per cent last quarter to 51 per cent now.
Regionally:
· Nearly one in two people from the Midlands (48%) with concerns about meeting their payments claim to be unable to repay their mortgage in the next three months, the highest percentage of people with this worry across the UK. Those most confident of their ability to repay are those living in London, of whom just 20 per cent have a fear of getting behind with payments.
· In contrast Londoners appear to be the most disorganised when it comes to managing their credit card bills - 14 per cent of people from the capital will struggle to repay their plastic bills in the next three months - in comparison to the more plastic-savvy folks from the East of England and Wales, where just 3 per cent of people have this worry.
Commenting on the findings, Shirley Woolham, Head of Financial Health at the CPP Group, said: "With base rate at 4.25% and expected to rise further this year, it is worrying to see that young people are already struggling to cope with their financial commitments. It is imperative that people take a good look at their finances to ensure that they have the ability to absorb both expected and unexpected increases in their outgoings, such as their mortgage and council tax payments, as these will only add further pressure. If people are concerned, they must talk to a professional about their situation."
The CPP Group has recently introduced Financial Health, a product which gives people a greater understanding and control of their finances and which provides a range of financial insurance, advice and support services.
