Axa: Teenagers blow budgets in experiment

More than two-thirds of teenagers taking part in an experiment set up by the AXA Financial Task Force blew the budgets they were given for a week’s worth of household spending.

Given a budget of £248.40 each, 70 per cent of the 15 to 17-year-olds went over this amount and one child spent more than twice their budget, racking up a bill of £597.73 in seven days.

Axa is concerned that Britain’s young people are unable to cope with their finances and may find themselves in financial difficulty if they continue to overspend once they hit 18-years-old and can apply for credit cards and loans.

Research conducted by Axa shows 44 per cent of 15 to 17-year-olds are planning to get a credit card when they become adults and nearly one in five are thinking about getting a bank loan.

These concerns were raised soon after PricewaterhouseCoopers reported that in the first months of this year, 25,264 people went bankrupt or entered into an individual voluntary arrangement in England and Wales.

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Debts hitting the young

Debts are hitting the young, with over half of England’s teenagers having experienced debt by the time they are 17, according to a new survey.

The survey, by pfeg (Personal Finance Education Group), found that 90 per cent of teenagers worry about money and spending, and two thirds think about money on a daily basis.

When it comes to overdrafts and credit cards, 90 per cent view them as an easy way to spend more than they earn.

The survey was conducted as part of a schools initiative being mounted by the pfeg in a bid to deliver improved personal finance education to the young.

Wendy van den Hende, chief executive of pfeg, said: “We owe it to our young people to ensure that they have the financial acumen to deal with the responsibilities of being an adult.”

“We firmly believe that incorporating financial education into the existing school curriculum in a way that is relevant to young people’s lives is the best way to help them gain and retain the financial skills they need for the future.”

Consumer debt in the UK has now exceeded £1.25 trillion.

Tags: Youth, Credit card, teenagers, trillion, finance education, group