Younger generation suffering from growing debts, FCA head says

The Financial Conduct Authority has said that young people are increasingly having to borrow money in order to cover basic living costs.

Speaking to the BBC, the financial regulator’s chief executive Andrew Bailey said there had been a major increase in the amount of people from younger generations who are in debt.

Bailey said the FCA was attempting to cut down long-term credit debt and pay-day loans.

"There is a pronounced build up of indebtedness amongst the younger age group," Bailey said.

"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 the affordability of basic living in many cases."

The FCA boss added that rising rent prices and a lack of income growth were forcing people to look for outside credit.

"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," he said.

The FCA boss added that “sustainable credit is a necessary part of society”, but that the body would maintain a close eye on high-cost lending schemes.