The news that personal debt in the UK now exceeds £1.4 trillion is alarming, however it’s the statistic that one in five young people have got into debt to keep up with richer friends, that causes particular concern.
That so many youngsters are willing to borrow so that they can have the latest gadgets, clothes and computer games is not surprising as they are continually bombarded with adverts and images of celebrities enjoying aspirational lifestyles.
It’s still easy to get a credit card, even when you are not earning much, and then even easier to use it to buy what you want, when you want. There is no need to wait for something, saving for it bit by bit. You can have it now, and then find a way of paying for it later.
The trouble is that young people are growing up with these “easy to come by” values. Borrowing for the latest computer game when you are 18 is one thing, borrowing thousands for your second holiday of the year when you are older is quite another. The problem is that one thing leads to another, but on a larger scale.
So with a culture of “I want it, I’ll get it”, we can expect the total personal debt mountain to increase further. However there is one fact that may intervene and that is the credit crunch. Borrowing is becoming more difficult for all of us and maybe amongst all the problems that lack of liquidity causes, the fact that we can no longer borrow on a whim is a good thing.