Alliance and Leicester found that those in their 20s had the lowest levels of credit card debt, while also having the lowest average cost for servicing their debt.
However, younger people do have the highest debt to income ratio, which means that they spend the same proportion of their incomes paying off debt interest as older people.
Chris Rhodes, managing director of Alliance & Leicester Retail Banking said: “Our research confounds the stereotype that young people are spendthrift and irresponsible with their finances.”
He went on to say that student loans made up the majority of younger people’s debt, but that this was low-cost borrowing and seemed to “constrain their appetite for other debt”.
ClearDebt believes the research may mask future financial woes for many younger debtors According to the company’s CEO David Mond: “To be spending as much of your income on debt in your twenties as in your forties implies that you may be maxxing-out on your available credit. We find many of the people who come to us for help have done this and then do not have the flexibility to borrow their way out of trouble when a major unforeseen event occurs.
“Loss of income, partnership break-up or divorce, childbirth, illness, unexpected expenses – these are just some of the life-changes that can make debt unmanageable and start people down the slippery-slope to bankruptcy.”