20 Apr 2007

Britons in their early 30s have larger debts than anyone else and are most the likely to have large personal loans and debts, but are not doing enough to minimise their costs.

That is according to new figures from Alliance & Leicester, showing the nation's borrowing habits.

UK residents in their early 30s spend the largest percentage of their income paying interest on loans, have the highest mortgage exposure and average personal loans, overdraft and credit card debts of £5,863.

This group is most likely to only make the minimum credit card repayment and the least likely to pay their bills in full.

This Friends generation are also the highest regular users of overdrafts and the demographic group most likely to have a personal loan and most likely to miss monthly loan payments.

However, moving to a better-value current account could see overdraft expenses slashed, an interest-free balance transfer could cut the cost of credit cards, and if this does not work a cheap debt consolidation loan could see payments heavily reduced.

"The early 30s are a transitional age where careers are taking off and before family responsibilities kick in," said Chris Rhodes, director of retail banking at Alliance & Leicester.

"Many are buying their first homes at this point, but are also enjoying rapidly rising salaries and are keen to enjoy life to the full. Some, particularly those not trying to get on the housing ladder, may find themselves in financial difficulty as a result living beyond their means."

By contrast, young adults aged 18 to 30 are far less reliant on borrowing, with student loans far and away the largest type of debt they have accounting for 47 per cent of their overall borrowings.

Middle-aged Britons (45 to 54 year olds) have slightly more unsecured borrowing than 30 to 34-year-olds but are more likely to be homeowners and almost four times as likely to own their homes outright.

Their homes are also worth more and those with mortgages owe less and have double the savings of the younger group.

Over-55s are the least likely to have personal loans and the most likely to have savings.

"The vast majority of UK households have very manageable debt levels and very few are living beyond their means," Mr Rhodes said.

"Responsible borrowing enhances lifestyles and helps families manage their finances over a period of time, enabling them to buy big ticket items such as cars and improve their homes, or spread the cost of expensive times of the year like summer holidays and Christmas.

"When borrowing becomes a lifestyle in its own right, the red light starts flashing."

Source : http://www.myfinances.co.uk/loans/news/personal-loan/personal-loans-biggest-brits-in-their-30s-$471620.htm