Survey hints at debt management time bomb

There could be a debt management time-bomb waiting for students unless they are wiser about their financial prospects, according to new research.

A survey by Friends Life of teenagers planning to go to university found that girls were more realistic about their prospects of having to deal with tough financial challenges during and after their studies.

These findings included 64 per cent of girls stating they planned to work while studying to supplement their income, compared with 46 per cent of boys, while 66 per cent of females anticipated having to do unpaid intern work as a means of getting into a paid graduate job – whereas only 57 per cent of boys did.

But while girls were more pessimistic about their situation, both appeared to underestimate the capacity to pay off debt they would have through getting large salaries.

The typical girl expected a starting salary in their first job of £23,000, while for boys it is £24,500.

However, the typical first job annual pay is £20,000 on average.

Human resources director at Standard Life Rob Barnett remarked: "Our research shows that both young men and women have unrealistic expectations about salary so it is important they start thinking carefully about their financial future."

The expert suggested the research was a clear signal that better financial education is required – particularly for boys.

Another financial issue students may have to learn quickly to deal with correctly is the use of credit.

Gap year students who are not used to having credit cards could find it "vey easy" to miss payments on them and incur "black marks" on their credit file, said vice-pesident of Credit Confidential Paul Lewis.

Posted by Paul Thacker