Debt causes mental health problems for young
As many as a quarter of 16 to-24-year-olds have suffered mental health problems because of their finances, suggests a new report launched today (Tuesday 24 June) by Citizens Advice and young peoples charity YouthNet.
The charities estimate that the project could reach as many as 500,000 young people, ensuring they're in a better position to manage their money and make informed choices about their finances.
The report, which is being launched as part of a 'Young People and Finance' seminar by YouthNet, HM Treasury and the FSA in London this morning, highlights a number of concerning trends in young people's borrowing and budgeting behaviour:
- One in five of the 16 to 24-year-olds surveyed admitted that crossing their fingers and hoping they don't run out of money at the end of the month was how they managed their finances
- Nine in ten respondents named parents as the source they're most likely to have used for financial advice. Friends came a close second with 76% and the internet third at 67%
- 80% of respondents had access to some form of credit or had done in the past
- More than two thirds (68%) of respondents had been encouraged to take out credit they did not want or could not afford
- Nearly nine in 10 (87%) respondents thought there were too many adverts on TV for loan companies and credit cards
- Almost half (47%) had experienced debt problems
- Almost two-thirds (64%) thought more information was needed to help people struggling with debt.
The survey also reveals worryingly low levels of understanding of common financial terms such as APR.
As well as helping with basic budgeting skills, the pioneering three year project - funded by £300,000 from the HBOS Foundation - will help young people understand commonly misunderstood terms such as APR, so they can compare credit and understand what a loan might mean for them.
Janet Roberts, Grants Manager at HBOS Foundation, commented: "This report highlights the serious strain bad financial decisions can put on people's mental health as well as on their pockets.
"But it also points out how and where young people want to be supported with their finances. Over the next three years we'll work closely with Citizens Advice and YouthNet to use the internet to help young people make informed choices about their finances, giving them the information they want, where they want it.
Information on money issues specially tailored to young people's needs will be hosted in the 'Money' section of YouthNet's young people's website www.TheSite.org – the guide to life for 16 to 24-year-olds. Audio versions of the same money advice will be available for young people to listen to online or download to their mp3 players.
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For media information please contact:
Sarah Wilson at YouthNet on 020-7250 5716 or out-of-hours on 07766 660 755
Email: media@youthnet.org
Moira Haynes at Citizens Advice on 020 7833 7107 or via mobile 07790 019 116
Email: moira.haynes@citizensadvice.org.uk
Notes to editors:
- Penny for your thoughts is the result of an online survey on YouthNet's website TheSite.org and Citizens Advice website, Advice Guide. 651 young people from the UK aged between 16 and 25 completed the survey between 23 October 2007 and 1 February 2008.
- For a full copy of the report contact Sarah Wilson, Media and PR Manager for YouthNet on 0207 2505716 or email media@youthnet.org
- Penny for your thoughts is being launched at the 'Young people and finance' breakfast seminar at 08.30 am on Tuesday 24 June, at YouthNet's offices in London. In addition to the results of the survey, presentations will be made by Anna Deibel-Jung from HM Treasury and Jane Hull from the FSA
- The Citizens Advice service is a network of independent charities that helps people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more information see www.citizensadvice.org.uk
- The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
- Most Citizens Advice service staff are trained volunteers, working at around 3,400 service outlets across England and Wales. Advice and information www.adviceguide.org.uk
- The HBOS Foundation was established in May 2002, following the merger of Halifax and Bank of Scotland to create HBOS plc. The Foundation works with charitable and 'not-for-profit' organisations across the UK, particularly those organisations that support people and their local communities. The Foundation's community giving is focused on two guiding themes; money advice and financial literacy and developing and improving communities.
- In addition, the HBOS Foundation is committed to working with colleagues throughout the HBOS group who want to put something back into their local communities, either through fundraising or volunteering. In 2006, HBOS's contribution to the Foundation doubled from £4m to £8m and in 2007 over 10,000 colleagues volunteered their time and skills for charities and good causes. The HBOS Foundation is a registered charity No.SCO32942.
- YouthNet is an online charity – founded by broadcaster Martyn Lewis in 1995 which aims to create a socially inclusive environment where all young adults are engaged, informed and inspired to achieve their ambitions and dreams.
- YouthNet achieves this through two websites: TheSite.org, a one-stop-shop of advice and support for 16 to 24-year-olds, and do-it.org.uk - the UK's volunteering database.