Debt is a part and parcel of everyday life. However, it appears that many people, especially the new generation is not serious about managing it well. This in turn is bound to cause problems in the future, more so in the long term.
The personal loan crisis
A recent report that was published by the Smith Institute in conjunction with StepChange throws light on the current debt scenario in the country. Based on the report, it appears that the situation is more akin to an epidemic such as AIDS. As per the report, one in four households lives on debt. An even more alarming piece of information is that one in ten households has a debt that exceeds 5000 GBP. In addition to that, it is believed that many of the households with debt have borrowed at least half of the money from payday lenders who charge a very high interest.
The future looks grim
Given the current mindset of many of today’s youth, it appears that the traditional ways of borrowing are seen as slow and time consuming. This is reflected by the fact that loans obtained through easier means such as those from payday lenders are rising each day. These loans, which attract much higher rates of interest, will eventually lead the borrowers into a debt trap.
Also, as the young rarely make plans for their retirement, it is projected that in the next decade, there will be many older people who are mired in personal debts than any other time in recent history. Hence, there has been emphasis from several quarters that the government must make all out efforts to educate people on the implication of debts more at a national level, something on the lines of an AIDS campaign during the 1980s. It appears that if no action is taken now, the society as a whole will have to suffer in the future.