Almost a third (31%) of people in the UK believe that they will not be able to repay their debt within their lifetime, while 12% state they will not be able to reduce their debt levels, according to new research from Equifax.
The survey, conducted with Gorkana, indicated that those aged between 18 and 24 are the most pessimistic with regards to debt, with only 50% believing they will pay back their debt in full during their lifetime, compared to 78% of 55-64 year olds. Furthermore, the study found that men are more confident they will clear their debt compared to women, at 73% and 65% respectively.
People from the East Midlands (59%) were the least likely to think they will repay all their debt over their lifetime, with those from the North East (16%) and London (16%) most likely to believe they won’t pay off any debt over this period.
Those aged 25-34 are most willing to make lifestyle sacrifices to manage their outgoings, with 78% buying own brand foods or shopping at budget supermarkets compared to just 58% of those 65 or over. Similarly, almost three quarters (72%) of 25-44 year olds have reduced their spending on items such as clothes, holidays and gym memberships in an attempt to reduce spending, compared to just 45% of those aged over 65.
Equifax head of financial difficulties Richard Haymes said: “There’s a clear generational divide when it comes to the perception and treatment of debt, with younger people feeling less confident of ever being debt-free. This may be down to factors such as increasing levels of student loans and exponentially higher property costs, as well as a prolonged period of low interest rates, which means credit for those who can afford is relatively cheap to access.
“With inflation hitting a six-month high in August (2.7%), a recent interest rate rise and limited wage growth, it’s disconcerting that a large proportion of people are taking on debt without a realistic expectation of being able to pay it back.”
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