Welcome to the new Independent website. We hope you enjoy it and we value your feedback. Please contact us here.

Loans & Credit

Younger people most likely to seek debt help

Government figures show those aged 25-34 dominate applications for insolvency scheme

The extent of the financial difficulties facing young people have been revealed, as government figures showed that more than a quarter of people turning to a new insolvency scheme are aged between 25 and 34, more than any other age group.

The government created debt relief orders (DROs) in April 2009, protecting from creditors those who have debts of less than £15,000, who don't own their own home and have less than £300 in savings or other assets. The large percentage of young people applying for the orders has seen the Insolvency Service launch a campaign encouraging people to seek help early.

The campaign is supported by debt advice charities, who are encouraging people not to put off seeking advice and helping them avoid the potential pitfalls of high-interest personal loans such as "payday" loans.

Joanna Elson, chief executive of the Money Advice Trust (MAT), said: "At the same age their parents would most likely have bought their first home, have a comfortable pension lined up, and be saving for the future. For today's 25 to 34-year-olds the picture is much bleaker."

Ms Elson said many of those suffering debt problems will be trapped in the private rental market, where costs have escalated as people have been unable to get on the property ladder.

She said: "Traditionally when young people have borrowed money it has been with the expectation of a continual rise in earnings over coming years. Young people today may have borrowed with the same expectations, but the difference is that those expectations have not been realised, leaving many struggling to meet agreed repayment plans."

At the same time transport, energy and food costs are rising. "The combined effect of all these pressures is that more young people are looking for a different solution to help them back on their feet, and for some the most suitable option is a debt relief order," Ms Elson added.

Some 44,000 DROs have been made in England and Wales since their introduction in 2009. Dubbed "bankruptcy light" by some, they are nevertheless a formal process and are not intended for those whose situations might improve.

To be eligible for a DRO, the debtor's disposable income, following deduction of normal household expenses, must not exceed £50 per month. The orders are aimed at people who have more modest levels of debt but no realistic prospect of paying it off.

Case study: 'It's hard to describe the feeling of relief'

Father of two, Darren Speed, is a 33-year-old cleaner from Cambridgeshire. He was granted a debt relief order earlier this year. Next year he will be debt free

"We were receiving threatening letters from debt collectors, but we let it fester for about six months before we decided to get help. It's crazy really. We struggled through Christmas and went to a local charity to see what help they could give us, and we were advised us about Debt Relief Orders. It's hard to describe how much of a relief it was. The quicker you get it done, the better. I'm not worried about picking up the phone, nobody's knocking on the door."

Why you wouldn't want to be a driving instructor

Driving instructors, chartered surveyors and choreographers are among those who have suffered a 25 per cent fall in the value of their earnings over the past four years.

Full-time workers in 277 occupations have suffered an average 5.9 per cent drop in living standards since April 2007 when wage rises are compared with inflation, says the GMB union. A study shows the fall is at least 25 per cent in 11 occupations.

There are falls of 20 to 25 per cent among chemists, leisure and theme park workers and public relations officers, and of between 15 and 20 per cent among bricklayers, decorators, hotel porters, labourers and kitchen assistants.

The smallest drop, of less than 5 per cent, includes pilots, chiropodists and electricians.