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Morning Line: Are we doing enough to help young people avoid debt?

By Deborah Hyde | 11:42:47 | 31 October 2008

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The government is abandoning its golden rules and advocating spending. Meanwhile banks and retailers are chasing teenagers' money. Are we doing enough to teach younger people how to avoid debt and shore themselves up for the future?

With 10,000s of kids facing ever-increasing debt piles with higher and higher interest rates, many still don't appear to realise that credit card debt can take longer to pay off than a mortgage.

And first time buyers are looking to borrow mortgages on terms of 35 years or more with many not really understanding how much it will cost or the possible impact of rising interest rates in the future.

Liberal Democrat leader Nick Clegg tells us today that one family is being turfed out onto the street every eleven minutes as the lenders take possession of their homes. But at the same time pop stars and football players are pushed in our faces to encourage spending at every opportunity. 

And finance companies and analysts alike are pointing out that credit cards could turn out to be as important a crisis as subprime  

In these troubled financial times, 'saving' still remains a dirty word and headlines everywhere suggest that saved money isn't safe. 

So how are we to going to teach young people – a key market for big business and traditionally future averse – how to avoid the mistakes we have made?

The government's attempts to teach personal finance in the maths curriculum has been criticised as apparently it isn't effective. Even the FSA says so.

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Comments (3)

constance blackwell - young people and debt

12:37 | 31 Oct 2008

One of the first things is to regulate lenders- currently argos has a charge card that has 200%d interest annually - why is that legal.

secondly to make it more clear what the really cost of an interest payment is 14 percent is usury - if the bank is borrowing at 5 percent - and is charging 10 percent it is charging 100percent over its costs -

when people see 14 percent they think that is not much - it is enormous -

It is not the poor and the young that need to monitor their spending as much as the government - who should make it clear the profits bgeing made - and regulate lenders -

There are vultures who come down on the poor who offer 100 percent or 200 percent interest

why are they allowed.

Daye Tucker - Young Debt

12:54 | 31 Oct 2008

This Government is clearly not going to lead by example. The least they could do is to encourage incorporation, within maths lessons, Personal & Social Development, and computing and business studies lessons in schools and colleges, scenarios on how to stay out of debt.

Rob Woodcock - Student Debt

23:11 | 31 Oct 2008

I find it in bad taste that the government advertises a future worth over £100,000 more in lifetime earnings, simply for attending university.

There will be Arts and other students in 4/5 years time who are considering suicide because they cannot repay their debts. The government will have loaned them c£20,000 and they will have no means of repaying it.

Their only hope is inflation, which is a pretty desperate thought.

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