Debt, investment, car insurance and savings

After a glorious Bank Holiday weekend, there’s depressing news for young people this morning: more than a third of them have debts of almost £3,000 and experience significant concerns about money.

A survey of 2,042 people aged 18 to 24, conducted for the Money Advice Trust by YouGov, found that they borrowed using credit cards, overdrafts and loans from family and friends. Just over half said they regularly worried about money, with 32 per cent feeling their debts were a ‘heavy burden’. Women were much more likely to worry about money than men, the survey found. The average debt of £2,989 excludes student loans and mortgages. The average student loan balance is £25,505. Investment

A record number of investments were made by foreign firms in the UK in the year to April 2016, according to government figures.

The Department for International Trade recorded 2,213 inward investment projects, up 11 per cent on the previous year. The data shows the UK is the most popular destination in the European Union for overseas firms. However, there is concern over how the UK’s vote to leave the EU may affect future investment decisions. Motor insurance

The cost of running a car for a young driver has risen by £98 or 4.4 per cent, primarily due to increased fuel costs as global oil prices rebound.

In its bi-annual Young Drivers report, comparethemarket.com found that over the previous six months, the annual costs of running a car for a 17 to 24-year-old has hit £2,299. 

Car insurance remains the most significant cost for young drivers, accounting for more than 54 per cent of the total annual cost of running a car. Car insurance premiums for 17 to 24-year-olds continued their upward trend, growing by almost 1 per cent or £10 on average, per driver, since the last report in March and by £143 compared to July 2015. The continual rise in car insurance premiums for young drivers is likely due, in part, to the increases in insurance premium tax announced at both the Autumn Statement in 2015 and the Budget in March 2016.

Prosperity Every region of the UK is better off than it was a year ago, according to a new study that found Scotland enjoyed the biggest rise in prosperity last year, beating London and several other booming English cities. The Guardian reports that, despite uncertain economic conditions during the year caused by volatile stock markets, China’s slowdown and the lead up to Brexit, Barclays’ latest prosperity index found that no region’s overall prosperity declined last year. Meanwhile, the paper also reports that consumers are feeling more positive about their personal financial situation but worried about the UK’s overall prospects, according to July’s Lloyds Bank spending power report. The monthly barometer, which tracks both spending habits and consumer confidence, found that in the weeks following the vote to leave the EU, almost 70 per cent of consumers said they believed their own personal finance situation was either ‘excellent’, ‘very good’ or ‘somewhat good’ – the highest level since the survey started five years ago. Savings

New research from Aegon finds that 93 per cent of those aged 45 to 54 say they face barriers to saving, or saving more, towards retirement.

With peoples’ late 40s and early 50s often said to be both the peak earning years and the key time to catch up on retirement saving, it’s concerning that among 45 to 54-year-olds, nine out of ten say they face barriers to saving towards retirement.

The most commonly cited reasons for not saving are the cost of living or insufficient income. However, 36 per cent of people say mortgage or loan repayments, followed by the costs associated with family (32 per cent) are the main barriers, leaving little money left over to save.

Children

UK parents may be feeling gloomy this autumn, as they are expected to splash out over £500 entertaining their children over the summer, according to Post Office Money’s annual Parents’ Summer Spending report. 

The amount parents spend on their children during the six week break has increased by a third over the last five years and this has likely had a lasting impact on their wallets as we head into the new school year. Almost a third spent more than they had originally budgeted for over this period last year.

A quarter of parents thought it likely they would dip into their savings to cover these expenses and some would consider taking a break from putting money away altogether while they spend over the summer. A further quarter assumed they would rely on their credit cards and one in five planned to make made ends meet by working overtime. Some desperate mums and dads would even consider skipping paying their mortgage (8 per cent) and household bills (6 per cent) during summer.