Nicholas Craig column

Mar 18 2005 By Nicholas Craig, The Journal

The under-30s are going for broke, it appears.

More than half of all personal bankrupts are in their 20s. Credit-card debt is going through the roof. As a result, the number of bankruptcies has hit an all-time high.

It is personal bankruptcies rather than business ones which are zooming up. Enterprise Act changes have cut the time to be discharged from bankruptcy to a maximum of one year.

For some, saddled with thousands of pounds of debt, bankruptcy is the new get-out-of-jail-free card. Last year, 75pc of all bankruptcies were self-declared - the highest proportion ever and more than double the rate of four years ago.

This region has always had a work hard, play hard reputation, with people spending rather than saving. Fifty years ago there was also a culture of paying for what you bought there and then, when you could afford it, rather than opting for hire purchase. How times change.

Young people are now offered credit wherever they turn. The expense of student fees, loans, living independently, furniture, clothes, travel and cars mounts up frighteningly. Many under-30s borrow more money to cover repayments of loans, and that leads to a debt trap.

What is even more surprising is the shocking rise in serious debt affecting retired people.

Apparently GPs are reporting that more elderly patients are coming to discuss non-medical problems such as debt. And a recent study by Age Concern shows that baby-boomers are running up more debts in their 50s than previous generations did.

Older borrowers are being squeezed at both ends, by children who are financially dependent well into adulthood and by their parents who are living longer and needing care.

"Neither a borrower, nor a lender be" may be a fine sentiment, but in reality only the very rich can avoid the need to borrow, whether to buy a home, a car or just to cover the minutiae of daily life.

We all need more information and education about the consequences of credit-card debt, personal loans and overspending.

Aggressive marketing of credit is endemic and is derailing careers, retirements and stress-free lives. It needs to be balanced with equally uncompromising warnings of what lies in store for a buy now, pay later culture, or more restrictions on those companies offering people the prospect of easy money.