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UK FCA chief warns over young people building up pronounced debt

Staff Writer |
Young people are building up "pronounced" debt in order to pay for basic living costs, the chief executive of the UK Financial Conduct Authority said.

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Andrew Bailey said credit should be available to young people, but borrowers and financial institutions needed to take into account the affordability of lending and the fact that interest rates may rise in the future.

He told the BBC: "There is a pronounced build-up of indebtedness amongst the younger age group.

"We should not think this is reckless borrowing, 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 said the FCA was looking into high cost debt practices.

"There are particular concentrations (of debt) in society, and those concentrations are particularly exposed to some of the forms and practices of high-cost debt which we are currently looking at very closely because there are things in there that we don't like.

"There has been a clear shift in the generational pattern of wealth and income, and that translates into a greater indebtedness at a younger age.

"That reflects lower levels of real income, lower levels of asset ownership. There are quite different generational experiences."

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