IOUs of iPod generation

Think-tank Reform claims that there is effectively a 50 per cent tax rate in force which will hit the under-35s who are already suffering from mounting debt, rising costs and low earnings growth.

“Young people are in danger of drowning under a sea of rising taxes and new compulsory payments,” Andrew Haldenby, director of Reform, said. “They are in desperate need of a lifebelt, in the form of a long-term commitment to public spending, discipline and tax reductions.”

Findings follow earlier claims that take-home pay is being diminished by increases in council tax and debt repayment.

However, this new report claims that the younger generation has been hit the hardest, with average wages for 22 to 29-year-olds rising as debt increases.

With the average graduate now owing £15,000, many may wish to consider taking advice on becoming debt free to help get themselves into credit to survive the rising cost of living.