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In the UK, it has emerged that over half of young women are seeking help with personal debt and arrears. That’s right, more young women are struggling with personal debt and arrears than are living comfortably. 52% of women aged 16-30, to be exact. The Young Women’s Trust, a charity that supports and represents women between 16 and 30 who are struggling to live on low or no pay and are at risk of being trapped in poverty, commissioned a study last year that discovered that young women are the worst affected by the UK’s debt crisis, followed closely by young men.
In short, the survey discovered that:
- 25% of young women across the UK are constantly in debt, compared to 23% of young men,
- 51% of young women run out of money every month, compared to 45% of young men
And, like with the debt crisis, the Financial Conduct Authority has made a statement on this unsustainable pattern. Speaking to the BBC, Andrew Bailey, the chief executive of the FCA, said:
“There is a pronounced build-up of indebtedness amongst the younger age group. We should not think this is reckless borrowing. This is directed at essential living costs. It is not credit in the classic sense, it is [about] the affordability of basic living in many cases.”
What does the fact that over half of young women are seeking help with personal debt and arrears mean in real terms?
In the most basic of terms, it means that over 50% of women under 30 in the UK can’t make it from month-to-month without borrowing money or relying on help from their family or the state.
Breaking that down a little more, of all of the women surveyed, 20% said that they relied on their overdraft every month, 18% said they relied on their family, 14% used credit cards and 14% worked more shifts at work.
Now, those statistics are pretty shocking in and of themselves, but here come two more that are really concerning: 11% of young women skip meals to make their money last, while 8% sell or pawn their possessions to get through the month.
Which means that – in addition to the fact that over half of young women are seeking help with personal debt and arrears – thousands of women are going hungry just to get through the month.
Why are young people so badly affected?
Talking about the results of the survey, Carole Easton, the CEO of The Young Women’s Trust, said:
“Young men and women tell us they need to work hard and be financially independent but as costs rise and wages stay low, more and more are fighting. Young girls are more likely to be stuck on low pay and on zero-hours contracts, which mean that they do not know how many hours they will work monthly and if they’ll earn enough to pay their bills.”
Adding to Ms Easton’s comments, Peter Tutton, head of policy at Stepchange, the UK’s leading debt charity, said:
“The feedback we get is that young people are disproportionately affected by insecure work and zero-hours contracts, which can make their income erratic. The also suffer from recent benefit changes, which can be especially harsh on single parents, and the shift away from home-ownership to renting.”
A study published by Stepchange last year, discovered that young people are typically spending over a third of their post-tax income on rent (or about 12% on mortgages) – a fact that speaks volumes about the nature of the problem. As over half of young women are seeking help with personal debt and arrears, we’re seeing the immediate impact that the current economy is having on the first generation that have to spend a significant portion of their salary on rent (not including other living costs like food and bills). For previous generations, only 5%-10% of income was spent on rent or mortgage. Even with other living costs, this still left previous generations with a financial buffer to either save, invest or spend on leisure activities.
Why are young women worse off?
While there are lots of possible reasons why women are worse off than men, from issues of sexism to personal choice (having a family, etc…), the study published by The Young Women’s Trust stated that one of the main reasons was that ‘young women are less likely than young men to feel able to take steps to improve work and pay’, giving the following statistics as evidence:
- 13% of young women feel confident asking for a pay rise, compared with 25% of young men.
- Young women are less likely than young men to feel confident about applying for a new job (55% v 64%), going for a job interview (50% v 62%) or in changing career (30% v 40%).
- 65% of young women compared to 56% of young men said they would be put off applying for a job if they didn’t meet all the criteria.
Add that to the fact that women are offered zero-hour contracts more than men (33% of young women compared to 28% of young men) and soon a picture of systemic inequality begins to form, leaving young women in a lose-lose situation.
What are the effects of this youth debt crisis?
Well, the effects are already beginning to be seen across everything from living conditions for young people to whether they choose to have children.
At present, 45% of young people (aged 18-30) live with their parents. (27% of 25-30 year olds still live with their parents, too.) On top of that, 20% of young women and 17% of young men moving back in with their parents because they can’t afford to live independently.
One in three of young women aged 25-30 (32%) in the study said that their financial situation probably means they will have to put off starting a family. And for those that already have children, one in ten young parents (10%) reported having previously used a food-bank because they couldn’t afford to buy food. This compares with 3% who weren’t parents that had to use food-banks.
Possibly as a result of the constant money worries, 40% of young people (45% of young women, 36% of young men) said they were worried about their mental health. Young people’s worries about their mental health have significantly increased since last year’s survey when 33% of young people reported such worries (38% of young women, 29% of young men).
What can be done?
When over half of young women are seeking help with personal debt and arrears, it’s clear that something needs to be done. On top of that, The Young Women’s Trust Annual Survey 2017 estimates that half of 18-30 year olds – around five million young people – are facing serious financial challenges, with almost a million of them going without food to make ends meet. But what can be done?
At the moment, very little. Aside from scrimping and saving even more and working even harder, young people are in no position to get themselves out of the situation they are in. The Young Women’s Trust say that in order to help the fact that over half of young women are seeking help with personal debt and arrears, ‘concerted action’ needs to be ‘across Government to listen to and transform opportunities for young people we risk losing a generation to low pay, debt, low self-confidence, worry, anxiety and ill-health.’
If you’re struggling with debt or are having money problems, don’t hesitate to seek help and advice.
There’s lots of great advice on the Citizen’s Advice site, or you can call them on 03444 111 444.
The Young Women’s Trust also offer free support and advice to anybody who needs it. If you’re seeking help with personal debt and arrears, then get in touch with them online or call them on 0808 808 8099.
- Author The Bamboo Team
- Posted 5 April 2018