Vulnerable young people and debt: in their words

Posted by Abigail Gill / Monday 15 December 2014 / Financial education

Our report, Paying the Price, considers the cost of vulnerable young people not receiving a decent financial education. They often end up in debt, which can lead to serious consequences as they become independent. We explore the issue through the words of our young people and staff.

Lots of young people, including the most vulnerable, are accessing high-interest loans and products. But why?

Some loans are easy to access

‘Having easy access to things makes people want more’  - young person

'I think this is a huge problem due to the ease of getting small loans. They do not sound much but young people aren’t looking at the amount they pay back with the costs factored in or the length of time it takes to pay off the debt’  - Action for Children practitioner

Recognising the risk isn't always easy

‘If you were to say it in cash terms, like ‘if you take out £10 you could end up owing £200,’ then many young people would realise that this is bad and wouldn’t take the loan out’ - young person

‘A young person took out a £100 payday loan to pay for his gas and electricity as he had a sanction from his benefits as a result of one missed job centre appointment. This young person has a mild learning difficulty and his literacy skills are poor. He did not understand the financial obligation he was committing to when he was granted a payday loan and I believe this was not explained to him either. This young person is now left with an interest of 1984% which he cannot afford’ - Action for Children practitioner

Pressure to purchase

‘I get so stressed in the lead up to Christmas but you’ve got to keep Father Christmas alive for the little ones’ - young parent

‘Young people leaving care want to be the same as every other young person their age, having access to phones and technology and not being aware of the consequences in the long-term’ - Action for Children practitioner 

Some vulnerable young people find themselves in a spiral of debt with no end in sight. For those who already face challenges in their lives, the effect can be devastating.

 ‘When you finally get money coming in and realise you owe it all out, it’s the worst feeling in the world. It makes you feel like dying’ (young person)

'Once people get into debt it’s a vicious cycle. Once you use one lender you need to use them all' (young person)

Debt means that young people are then subject to exploitation from others, some sexually, and rely on others to provide them with food or accommodation’
(Action for Children practitioner)

So what next?

We’re concerned that some young people end up in debt because they haven’t received a decent financial education. Without that knowledge, it’s really difficult to make sound financial decisions.

We’re calling for Governments across the UK prioritise preventing vulnerable young people from experiencing financial difficulties. Help us speak out:

Join the conversation.

Find out how you can become a campaigner, stay up to date with our latest tweets and join in the discussion on our blog.