'Crash and burn' generation asks, why save?

The economic situation has created a "crash and burn" generation of youngsters who run up bills because they feel they have no chance of getting the house, well-paid job and car their parents took for granted, experts have warned.

Debt help organisations say they have seen increasing numbers of young people who are living with their parents and spending money recklessly – as they believe there is no point in saving for the future.

The National Debtline has seen the number of calls it receives from people aged under 35 almost triple since 2004, as more young people find they have spent beyond their means.

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The recession, combined with soaring house prices over the past decade and the lack of available well-paid jobs, has meant that people in their early twenties feel like there is no longer any real chance that they will be in a financial position to get on the housing ladder – nor do they see any point in putting money into a pension. As a result, they blow all of their disposable income on social activities and pricey purchases such as the latest mobile phone, laptop or designer clothes.

Citizens Advice Scotland has seen increasing numbers of young people who have got into debt without having any real burdens on their finances.

The latest statistics from the National Debtline show that just 7,702 called the help service in the first three months of 2004, compared with 21,454 calls in the same period this year – a 279 per cent increase.

• Case study: 'People of my age don't think about saving'

"This generation is not 'lost' – not yet – but they are 'trapped'," said Lucy McTernan, chief executive of Citizens Advice Scotland.

"The evidence we've been publishing this year shows that young Scots are bearing the brunt of the economic downturn, and this is having an impact on how they see their economic future, and how they behave economically. For generations, the standard model has been that you grow up, get qualifications, get a job, buy a house, get a better job, start a family, get a pension scheme, buy a bigger house, etc.

"The young people we spoke to in our survey were telling us very clearly that they can't do that any more – they don't have that option. They are living in a limbo. And it makes many of them feel that they have failed the natural vision of how their life is supposed to go."

Yvonne MacDermid, chief executive of Money Advice Scotland, warned that parents needed to take responsibility to ensure that their children did not continue to fritter away their earnings.

"Our advisors are increasingly seeing a crash and burn situation for young people," she said. "They are often living at home so have no need to take responsibility – there is no mortgage company chasing them, or an electricity or gas firm – as their parents are paying all that. So they spend all their money on the latest gizmos and must-haves."