YOUNG BRITS FRANTICALLY SEEKING BANKRUPTCY ALTERNATIVES AS OVER A THIRD STRUGGLE TO COVER EVEN THEIR BASIC LIVING EXPENSES
Young people are resorting to high-interest loans, credit cards, and gambling in a bid to pay off their debts.
Unprecedented numbers of young people are seeking bankruptcy alternatives amid growing financial pressures exacerbated by the pandemic. Leading debt specialists IVA ADVICE revealed the worrying trend after an ONS report showed 34% of people under 30 struggle to pay their usual expenses. The latest figures also reveal that around 37% of young people would be out of pocket if they had to pay for an unexpected expense.
According to independent debt experts at IVA ADVICE, young Brits are turning to high-interest loans, credit cards, and even gambling in a bid to pay for their expenses.
Young people have been among the worst hit financially during the second lockdown. Those under 30 were 35% more likely to be furloughed than the general population. They also experienced a six-fold increase in furlough rates as compared to the first lockdown.
Thomas James, Operations Director at IVA Advice, said: “The last few months have been tough on everyone, but the younger generation has been among the hardest hit. I have seen an unprecedented increase in queries from young people who are struggling financially.
“Young people in financial difficulties often become magnets for creditors offering high interest loans through targeted online adverts. I firmly believe these loans are never the answer, as the repayments can quickly spiral out of control, making the situation even worse than it was before.
“Many young people have also turned to gambling because they believe they can win big to pay their way out of debt. They never do, and it just piles even more pressure on them financially. This truly is the untold story of the pandemic.”
Mr James added: “I would advise anybody who is struggling financially to seek advice from an independent financial organisation before making any decisions about potential debt solutions.”
While bankruptcy numbers remain low, in part due to government support for businesses and individuals, the last three months have seen a 24% surge in Individual Voluntary Arrangements (IVAs). The government’s latest insolvency report shows there were, on average, 6,388 IVAs registered per month in the three-month period ending in March 2021.
An Individual Voluntary Arrangement is a debt solution for those struggling to pay their unsecured debts.