Spreadsheet Phil (AKA Philip Hammond, the Chancellor of the Exchequer) is up to something. The rumour is that he is planning tax breaks for young people in an attempt to promote ‘intergenerational fairness’ in the Budget next month.
Tax relief for older workers would be cut in order to pay for giving workers in their 20s and 30s a break, The Telegraph reports. A Whitehall source told the paper that the announcement is set to be a ‘bold’ attempt to ‘restack the deck for the next generation’. Should the rumours be true, the timing couldn’t be better. It’s no secret that young people are struggling – particularly as a result of soaring housing costs and stagnating wages.
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Today the head of the Financial Conduct Authority, Andrew Bailey, publically expressed concern about data which shows that young people between the ages of 18 and 34 are borrowing money just to cover basic living costs, as the number of people in that age group declaring themselves bankrupt rises by a third. Figures from the National Insolvency Service show that young women are particularly badly affected.
Speaking to the BBC, Bailey warned that growing debt among young people is ‘worrying’ and said that there has been a shift in wealth and income amongst generations which has caused young people to get into debt. He specifically cited ‘lower levels of income and lower levels of asset ownership’ as related factors, this means low wages and not owning homes.
He was very careful to stress that this is not because young people are being reckless and borrowing unnecessarily. ‘We should not think this is reckless borrowing’ he said ‘this is directed at essential living costs. It is not credit in the classic sense, it is [about] the affordability of basic living in many cases.’ Bailey took aim at high costs payday loans and called for sustainable and affordable credit.
None of this can come as any surprise, we know that 1 in 3 renters are getting into debt just to cover the cost of their rent which, so often, outstrips earnings. A recent survey conducted by Shelter found that of the almost 1.6 million renters fall into the ‘low-earner’ category. One in three of them – around 511,000 – had borrowed money during the past year to keep on top of their rent.
Have you borrowed to cover basic living costs? We’d like to hear from you. Let us know by sharing your story with The Debrief.
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Renters Are Spending More Of Their Income On Rent Than Any Other Time In History
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This article originally appeared on The Debrief.