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Callcredit Check reveals average student debt repayment will take over 12 years
June 2009
Callcredit research shows 44pc of 18 - 24s are not saving at all
Key statistics
- 44pc of young people aged 18 - 24 are not saving any money at all
- 64pc are more concerned about their financial situation today than in April 2008
- 8pc of 18 - 24s spend over 50pc of salary on unsecured debt
- It would take over 12 years to pay off the average student loan on the average graduate salary
As students across the country come to the end of their courses, analysis by online credit report provider Callcredit Check shows that the average student debt will take over 12 years to repay. YouGov research commissioned by Callcredit has also shown that 44pc of young people aged 18 - 24 are not saving any money at all and 64pc are more concerned about their financial situation today than in April 2008.
As the average student debt is £15,700 and the average student starting salary is £22,300, the monthly repayments for a graduate with this debt would start at £54.00 a month and would take up to 12 years to repay taking into account an annual average wage increase of 4.6pc. Whilst of course inflationary, interest rate, salary and bonus changes affect the size and rate of repayments, this demonstrates what a tough financial environment students are graduating into.
YouGov research commissioned by Callcredit compounds this, showing that 44pc of young people aged 18 - 24 are not saving any money at all and 64pc are more concerned about their financial situation today than in April 2008. A significant minority of 8pc of 18 - 24s spend over 50pc of salary on unsecured debt.
Owen Roberts, head of credit report provider www.callcreditcheck.com comments, "Managing your finances as a student or a new graduate can be tough. As a graduate in particular, trying to balance what may be a relatively low income with high debt levels, rent and other costs of living can prove very tricky. Crucially, it's at this time of life you may start to see the impact of your credit history, as lenders will use it to decide whether to lend to you and at what rate. While each lender has different criteria, key to working up a good credit score is showing a consistent ability to service your debt levels, so paying phone bills, rent, credit cards, student loans etc on time is important if you're looking to secure the most competitive deals."
