Young generation plunging into debt

The young generation, although it is just entering adulthood, often has financial arrears at the very beginning. People under 36 have a total of PLN 5.8 billion in debts, and the average debt of a young person is over PLN 5,000, according to the data of the National Debt Register (KRD) of the Economic Information Bureau (BIG).

Every fourth debtor listed in the National Debt Register is under 36 years old. This group consists of representatives of the Z generation, i.e. people aged 18-25 and younger, and a part of the Y generation, i.e. millennials, aged 26-35. It is a total of almost 640,000 people.

“The high percentage of people under the age of 36 among debtors can be a worrying signal. It shows that many Poles enter adult life with a financial burden. In addition, as we see in our register, the number of debtors from the youngest generation is the fastest. While in other age groups the number of debtors in 2020 practically did not change or decreased slightly, in the case of people aged 18-25, their number increased by 18 percent. At the same time, the amount of their debt increased by a third during this time. It is still lower compared to the arrears in older age groups, but it is growing at the fastest pace,” Adam Łącki, President of the Management Board of the KRD, said.

The growing indebtedness of the younger generation can be explained by their great needs with a small budget. Fashion and lifestyle have a huge influence on the Z generation. There are new gadgets and trends all the time, and keeping up with them costs money. If you add easy access to financing – through installment purchases, a consumer loan or a quick loan, and little experience in the field of independent financial management, the probability of incurring impulsive and ill-considered obligations increases. These, however, if not paid, turn into debts.

(WBJ)