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Peter Black and South Wales West Liberal DemocratsRepresenting Aberavon, Bridgend, Gower, Neath, Ogmore, Port Talbot, and Swansea |
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Government must act to stem epidemic of debt among young people demands AM
July 18, 2006 12:00 AM
Peter Black campaigning with the Citizen's Advice Bureau
Peter Black AM is urging the Labour Government to act swiftly in order to curb 'predatory lending' by banks and credit card companies.
Mr. Black was speaking after the publication of a survey on the thisismoney.com website that suggests that 75% of young people aged between 18-29 have an overdraft facility on their current account. The average overdraft is £656.
The survey has been carried out by uSwitch.com. The findings include the fact that the majority of overdraft users fund everyday spending, with 55% admitting to using it to buy food and 49% using the money to pay bills. More worryingly, 29% of young people said they relied on the facility to repay existing debt. At the same time 17% of 18 to 29-year-olds admitted they would rather use their overdraft to pay for something they couldn't afford rather than go without it.
"This research highlights the fact that there is a pressing need to help young people when it comes to financial understanding," said Mr. Black. "All the signs point to a huge shift in the financial knowledge of young people now compared with their parents. New Labour's university tuition fees, high house prices and the aggressive marketing of credit are all contributing factors.
"Although there is some financial education and help for people when they are in difficulty, the focus should be on tackling this problem before it occurs. There should be a genuinely independent financial advice network to help people before financial hardship takes hold. It is clear that the banks themselves are not going to act to curb this predatory lending. That is why government must step in and set up such a network as a matter of urgency."
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