UK Money News
21st May 2008
Teens plan on taking on debt
Millions of teenagers approaching adulthood are planning to apply for personal loans, overdrafts and credit cards when reach 18 despite their financial inexperience, a new survey has shown.
Axa conducted an experiment to assess budgeting skills among 15-17 year olds, who were entrusted to manage their household budget for a week.
Of these some 70 per cent overspent, with the majority going over budget by around 16 per cent.
However, despite this lack of financial acumen, close to half of the teenagers polled are looking to use debt to fund their lifestyle when they become an adult.
Professor Nick Chater who assisted in the research said that the findings were indicative of the buy now pay later culture that the youngsters have been brought up in.
He commented: "Our study suggests that they simply may not be able to cope with budgeting effectively.
"This may explain why so many children are already considering getting overdrafts and credit cards. These things are seen as the norm so that teenagers think they're only doing what is typical in expecting to get into debt sooner rather than later."
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