Figures released by the Skills Funding Agency at the end of June, show just 375 000 apprenticeship starts for the 9months between August 2014 and April 2015. Only 100 000 of the new starts are by young people under 19 and another 125 000 by those aged 19-24. In otherwords, 4 out of 10 starts are by those over 25, most of whom will be existing employees.
6 out of 10 starts are at Intermediate (GCSE) Level – with just 13,200 at Higher Level. The figures also show more starts by women (52%) than men. This reflects the large number in Business, Administration and Law (approaching 1 in 3 of all starts) and particularly in Health and Care (1 in 4 ). Just over 1 in 7 starts have been in Manufacturing and Engineering and only 1 in 20 in Construction.
Despite a relatively high media profile, apprenticeships are not expanding in the way they are being promoted. On the contrary, start figures are levelling off. Unless there’s a dramatic change in direction the new government will struggle to get anywhere near its election promise of creating another 3 million for young people during this Parliament.
The statistics also show the UK workforce continues to be more highly qualified than ever, with 81% of workers having reached level 2, 62.6% to Level 3 and 41.0% to at least Level 4 (equivalent to first year degree). With 80% of the new jobs being created said to be ‘low skilled’ , despite what government leaders might say, standards in education and training remain well ahead.
Cridland has called for GCSE to be abolished within 5 years ‘High-stakes exams at 16 are from a bygone era’ and, in a further swipe at the Gove/Morgan examination reforms, for the status of vocational learning to be upgraded. ‘For too long, we’ve just ‘pretended’ to have a multiple route education system. Yet in reality there has been only one path the system values – GCSEs, A-levels, University.’
Cridland’s comments put him closer to Labour’s Tristram Hunt and his Tech-Bacc, but also to Tory, Lord (Kenneth) Baker, the instigator of University Technical Colleges. Cridland also calls for a more flexible ‘personalised’ curriculum allowing academic and vocational study to be mixed and which would provide ‘Great teachers in classrooms with the freedom to deliver great, innovative teaching harnessing new approaches and technologies’. He also wants much better careers advice, closer links between employers and schools and the restoration of the careers service.
The GCSE used to be considered the ‘teachers exam’ because of its emphasis on coursework and because it was available to all. Those days are long since gone and as a result, many would support Cridland’s calls for abolition. Yet on the other hand, there is no reason why some form of assessment at 16 shouldn’t continue, but within a much broader baccalaureate framework providing the main certification at 18.
Cridland’s proposals for vocational education are less clear and much weaker. On the one hand he wants to include more work experience and like many others in the UK, including Baker and Labour’s Lord Adonis, looks to Germany for inspiration. At the same time he wants vocational courses to also have the ‘gold standard’ A-level label – even though the most successful vocational course so far, the GNVQ was reinvented as a vocational A-level in Labour’s Curriculum 2000 reforms, but failed to establish itself as entries dropped to a few thousand.
The main problem with Cridland’s approach and that of Baker and Hunt for that matter is it’s refusal to be critical of ‘academic’ education in itself – only to say that it’s not suitable for everybody. Thus. ‘For many – including me, and most Ministers – that path was the right one. But for many others, it’s not’. Isn’t this just another way of saying that ‘vocational qualifications are all right for other people’s children…’ ?
A serious analysis of qualifications has to consider the part played by what sociologists call ‘powerful knowledge’. Labour governments have been trying to improve the status of vocational qualifications for years but haven’t succeeded. Powerful (academic) knowledge has long been upheld by elite universities –where few if any ‘vocational’ students are ever admitted. It’s powerful knowledge, not it’s vocational or practical content that secures jobs in the City or leading roles in business.
Not surprisingly this isn’t addressed by Cridland, (MA, History, Christ’s College Cambridge) yet until it is, differences in status between different types of knowledge will also continue. We could make a start by calling for a general diploma with a mandatory core of academic and vocational study, in otherwords, without different routes or ‘pathways’ and then campaigning for it to be the main entrance qualification across higher education.
Better careers advice should also be encouraged, but has to be in the context of expanding job opportunities themselves. The problem for most young people isn’t that they make the wrong choices –but that there are little in the way of alternatives. In an economy becoming ever more sharply divided into ‘lovely’ and ‘lousy’ jobs and where people are as likely to be overqualified than lacking skills, there’s no real evidence, at least not yet, that doing an apprenticeship, that’s if you are lucky to get one, will ever allow you to earn anywhere near as much as if you have even a reasonable degree.
The countries where the differences between academic and vocational learning are smallest, are invariably countries where the level of inequality has always been lower and where vocational and technical education has traditionally been part of a defined route into employment. Cridland’s proposals should be welcomed by educational reformers, but they still leave as many questions as answers.
If George Osborne’s proposed legislation to make budget deficits ‘illegal’ goes ahead, then public services will no longer be able to be expanded as a way of stimulating future economic growth and activity. Or at least, it will be up to the Office for Budget Responsibility (OBR) to decide whether ‘exceptional circumstances’ allow this to happen. It isn’t clear whether Osborne would be able to legally bind a future administrations to a future course of action and his actions can be seen as more about pushing Labour ‘Blairite’ leadership candidates to accept even tighter restrictions over economic policy –here he seems to have already been successful.
Ironically, the last Chancellor to run a budget surplus was Gordon Brown at the end of the 1990s –then, the City boomed, consumer credit expanded at alarming rates and it was declared there’d be ‘no more return to boom and bust’. Osborne’s main line of attack has been to argue that subsequently, Labour spent too much, leaving no money aside to cover the cost of a future recession (even though going into the 2010 election the Tories committed themselves to maintaining Labour’s spending levels). This was then outrageously ‘spun’ to mean that Labour was at least partly responsible for the downturn –an accusation Miliband’s team appeared incapable of seriously challenging in the election campaign.
Deficit reduction has continued to focus on the need to make spending cuts – but it has been the loss of taxation revenue that has been the main reason why Osborne has continued to have difficulties reducing the deficit and why, as some commentators predict, he may still not have cleared it by the end of his second term – the OBR has already revised its forecasts downwards. While Osborne brags about creating a thousand new jobs a day, some estimates put the annual loss of income tax at over £25 billion (over a quarter of the current deficit and more than twice the amount of the latest round of welfare cuts).
This is because a large majority of new jobs have been low-paid, irregular/zero-hours and unable to generate this tax revenue. Output has been increased by drawing on a ‘reserve army ’of labour, rather than increasing productivity. With technological changes also wiping out many skilled jobs, there’s every reason to think that this situation will continue, especially as the public sector and in particular, public sector investment continue to decline, a consequence of Osborne’s main political objective – reducing state activity to a level not seen since the 1930s.
Campaigns against austerity can be combined with positive proposals for reforming the labour market. Not only raising the minimum, but also the ‘living wage’, limiting pay differentials between those at the top and the bottom, guaranteeing hours and security of tenure. Also, ensuring pay levels not only reflect increases in the cost of living but also keep up with increases in profits.
Recently released figures, show a fall in the proportion of NEETS, down from 13% to 12.3% of all 16-24 year olds. According to Skills Minister Nick Boles, this ‘demonstrates that our economic plan is working’ –yet there are still 943 000 young people being in this category. Take a look at the figures in more detail though and a less certain picture emerges. There’s been a slight rise in the number of 16-18 NEETs for example, from 6.8% to 7.1%. 14% of 18 year olds are also now classified as NEET (up from 12.6% a year ago).
The NEET rate is not the same as the unemployment rate. The latter includes students who are also looking for work in this case, currently about 250, 000. Only about half of NEETs are unemployed however –the remainder being ‘economically inactive’, not seeking work or not able to work. Arguably though, NEET statistics provide a better and more accurate picture of youth joblessness.
It’s difficult to make accurate international comparisons, but the UK is well above OCED averages, if well below the 25% rates of Greece and Spain. There are more female NEETs but nearly two-thirds of these would not be able to enter employment because of home or family responsibilities. Northern areas have a much higher concentration of NEETS (North East 18.1%, Yorks & Humberside 15.2%) compared with London (10.1%).
Despite the recent increase noted above, the number of 16 and 17 year old NEETs has declined significantly since the start of the 21st century. This has been the result of increased staying on rates in full-time education, – 87% of 16 and 17 year olds now staying on compared to just over 70% in 2000, the raising of the mandatory participation age to 17 and now to 18 from September 2014, was designed to reinforce this trend. Now figures show that the increase in 16-18 year old NEETS is the result of a rise in NETs (those not in education or training) which suggest that ‘staying on’ has reached a saturation point.
But 16 to 18 year olds constitute only about 20% of total NEETs, compared with 19-24 year old NEETs. It’s these older NEETs which will be the focus of attention for the new Conservative government. Adopting a new American style ‘workfare’ approach the Tories will (to quote from the Queen’s Speech) ‘put in place a new Youth Allowance for 18-21 year olds with stronger work related conditionality from Day 1. After 6 months they will be required to go on an apprenticeship, training or community work placement’. Refusal will lead to withdrawal of benefit.
Yet the NEETs problem represents the sharp end of a wider youth employment problem. While there’s a notable correlation between low levels of qualifications and becoming NEET and that NEET’s are more likely to have lower levels of basic skills, at the other end of the spectrum is the increased numbers of youth people who are ‘over skilled’ and ‘underemployed’ in the work they do –OECD now puts this figure at I in 8.
This problem is particularly acute in the UK with up to a third of graduates having to take non-graduate jobs, resulting in the bumping down of those who would generally have done these jobs into lower skilled and lower paid employment. Because there’s been a more than proportionate increase in the growth of unskilled work, there’s been an even larger increase in the number of people or who are able to do it. Generally employers will favour those with more qualifications. But, something on which UK skills agencies regularly comment, unless there are proper incentives employers are less likely to want to employ young people without previous employment experience, when they can take on adultsinstead.
In Wednesday’s Queen’s Speech, David Cameron reiterated his commitment to creating 3 million more apprenticeships.
‘A new Bill will help to create two million more jobs this Parliament. That means there should be a job for everyone who wants one – in other words, full employment. To help people get those jobs, we’ll train them up; three million more will start apprenticeships over the next five years’ (QS p5).
But in the Cameron/Osborne economy, job creation will depend on market forces, not government intervention. As a result this is soon qualified to mean only that:
‘New duties will require my ministers to report annually on job creation and apprenticeships’ ( QS p7).
In terms of the new apprenticeships however, there are much greater uncertainties. In labour market statistics, apprenticeships count as ‘jobs’ – apprentices are ‘employees’ and have to receive wages – even if employers are allowed to pay a lower legal minimum wage to some young apprentices.
During the last Parliament just over 2 million apprenticeships were established, but as the government’s own survey below shows, (Apprenticeship Pay Survey, DBIS 2014) many of these were for existing employees – rather than contributing to the 2.5 million new jobs the Coalition claimed to have created.
Proposals for improving apprenticeships, like that by Dragon’s Den entrepreneur Doug Richard,(Richard Review, 2012) have stated that apprenticeships should only be defined as new jobs and new roles, rather than current employees converting. In otherwords, Cameron’s promise for this Parliament is likely to be disingenuous, or at best, based on ignorance. With recent figures showing apprenticeship starts tailing off, it’s also likely to be pie in the sky.
During the election, Tory promises to young people never got much further than David Cameron’s pledge to create another 3 million apprenticeships during the next parliament. He provided few other details apart from outlining how the new opportunities would be at least part financed by cutting benefits for unemployed young people.
As well as promising another 3 million, the Conservative manifesto pledged to ‘roll out Degree Apprenticeships’ –by this we assume it meant more Higher Level schemes. Cameron, took advantage of pre-election media attention, launched a new Whitbread scheme, announcing he wanted apprenticeships to be on level-pegging with a university degree giving millions more people the dignity of work and a regular pay packet (BBC Election 2015, 09/04/15); but the new apprenticeships were at the subsidiary Costa Coffee and were part of a programme, which as well as teaching how to make hot drinks, included customer service, communication and team-building skills (!)
With the election days away, Cameron also promised that £227 million raised from Deutsche Bank Libor fines would be used to create 40 000 apprenticeships for 22-24 year olds who’d been out of work for 6 months (The Guardian 28/01/15). In fact the Tories plan to abolish long term youth unemployment, by replacing the Job Seekers Allowance with a US ‘workfare’ style Youth Allowance, where failure to accept a training offer or participate in voluntary and community work will lead to this being withdrawn.
Regardless of Cameron’s intentions though, government has little control over how many apprenticeships are created, let alone at what level they are being offered. Unlike the ‘nationalised’ German system –often cited as a successful model to emulate and where apprenticeship numbers are planned by employers, state and trade unions, where training is tightly regulated and where an apprenticeship provides a ‘licence to practice’, the UK depends on apprenticeships being generated largely by market forces and employer demand. New arrangements currently being piloted, will defer further, decisions about recruitment and training to individual employers.
With the post-crash economy generating four low skilled, low paid jobs for every skilled, professional or managerial opportunity however, it’s questionable whether most employers want apprentices. This is the main reason why, even if the proportion of young people on apprenticeships has risen, overall numbers have stalled. Even though the Coalition created over 2 million, many of these have involved existing employers being ‘converted’ to apprentices or have been ‘intermediate’ level, equivalent to the GCSEs that most young people already have and without guarantees of future employment or progression. Rather than needing ‘degree level’ apprentices, employers also have thousands of underemployed graduates that they can draw on
Martin Allen argues that Labour’s manifesto leaves as many questions as it provides answers
Claiming to offer a new alternative for young people at the upper end of secondary school and in Further Education, Labour’s election manifesto retains some old themes –particularly in its policies for vocational education where it wants to introduce a Technical Baccalaureate and ‘create a route for the 50% of young people who do not go down the traditional academic route’ (Labour Manifesto: 37).
The Techbacc will, Labour says, act as ‘gold standard’ qualification at post-16, be accredited by employers and include a quality workplace placement. This could be considered a welcome change after Michael Gove’s preoccupation with academic subjects of his English Baccalaureate, his obsession with returning to ‘grammar school’ assessment, with end of course written exams, rather than modules and the further obliteration of coursework. In many other respects however, there is a serious danger that past mistakes will be repeated.
A raft of different vocational awards have emerged since the 1990s, GNVQs, Vocational A-levels and finally the infamous Specialist 14-19 Diplomas on which Labour spent millions and which were already stalling by the time Gove came to office and quickly abolished the extra funding for them. Ironically many schools and colleges have now returned to the BTEC qualifications, that the reforms sought to replace.
The main problem with vocational qualifications is that they’ve never enjoyed the same status as academic ones and have been seen as only appropriate for ‘non-academic’ students. They’ve also lacked currency with the very employers who are said to need them. More significantly, the value of vocational qualifications is being further eradicated due to the polarisation of labour market opportunities and the disappearance of the sorts of ‘intermediate’ jobs they are designed for. Besides, employers now have plenty of under-employed graduates they can fill these jobs where they do remain!
Most reformers , including the National Union of Teachers, have recognised that either vocational and academic qualifications need to be properly linked together by an overarching certificate, which was the aim of the 2005 Tomlinson report, or that separate vocational pathways should be abolished completely and vocational study available as an option linked to a common core of a General Diploma. Previous Labour governments, reluctant to undermine the status of the GCE A-level have not followed this advice though. Reformers have also worked within a 14-19 perspective with the main assessment at 18, but, at least for the moment, Labour has accepted Gove’s GCSE reforms and with it the assumption that assessment at 16 should continue to be the most important part of secondary education.
Labour has said almost nothing about the detail of how the Techbacc will be constructed, so we’d have to assume that rather than spend money on new ones, a deficit reducing Miliband government would use either the existing vocational awards –those that have not been culled by Gove, or follow the approach of Lord Baker and his University Technology Colleges (UTCs) –although the manifesto says Labour will transform high performing FE colleges into Institutes of Technical Education, because of the Techbacc’s post-16 focus.
It isn’t clear either, how the Techbacc will exist alongside apprenticeships. While the Conservatives, following the recommendations of the 2011 Wolf Review, want to replace many vocational courses with apprenticeships, Labour has signalled its intentions to also provide apprenticeship opportunities for all young people qualified to do them. It wants to ensure that these run to at least level 3 (A-level equivalent) are also ‘gold-standard’ and that apprentices can progress to new technical degrees.
Given that many of the current apprenticeships continue to be low-skill and ‘dead end’ this is to be welcomed, but any future government will not be able to deliver apprenticeship promises, let alone rebuild vocational education as a worthwhile option for young people, unless there is an economic strategy to create higher skilled secure employment, rather than the low-paid, low skilled, ‘zero-hours’ jobs on which the recent ‘recovery’ has depended.
PATRICK AINLEY WELCOMES ‘LABOUR’S FEES PROMISE – AS A STEP IN THE RIGHT DIRECTION’ IN LATEST ISSUE OF POST-16 EDUCATOR
Introduction: a decision at last!
Labour’s long awaited promise of a reduction for all English undergraduate student fees to £6,000 from 2016-17 (so many applicants may defer entry this year) will require speedy legislation in the new Parliament. It will also have knock-on effects on HE-in-FE students and those in the private colleges David Willetts encouraged to charge £6k or less. There are also implications for the Office for Fair Access which ensures that universities currently charging more than £6k agree to improve access.
To counter accusations that these changes will benefit rich students, Labour also announced raising the maintenance grant by £400 per year for those with a family income up to £42,000. This is not much with which to address student poverty but, on the other hand, Ed Balls will tax wealthy parents and other individuals salting away taxable pension contributions to produce £2.7bn annually of the c.£3bn required to bridge the gap in reduced fee funding. So HE staff are reassured they can keep cramming students in to keep themselves in jobs, although maybe a Labour government would also reimpose student number controls. Even if all the money for fees came from tax-payers though, it could hardly cost more than the current wasteful system!
This is because ‘Two Brains’ Willetts lost what Andrew McGettigan called his 2010 Great University Gamble since the government admitted it does not expect to recover more than a third of what will add up to £330 billion unpaid student loans by 2046 when outstanding balances begin to be written off. Repayment terms were not altered to start at a lower threshold than £21,000, although this could still happen. So could a range of individualized repayment schemes varying by course and institution. ‘Two-Brains’ even returned after last summer’s reshuffle with his latest dead-in-the-water wheeze to sell the junk debt to the universities but they weren’t buying – any more than anyone else! Despite these and other unresolved isssues, UCU and the National Union of Students, which both want fees phased out as in Germany and other European countries, are right to welcome the proposed reduction as a step in the right direction.
Student or ‘apprentice’?
However, if the Conservatives get back, Labour predict they will raise the cap to £15,000 but why not uncap altogether? Universities that could not compete on price would then go to the wall. Many would collapse into virtual learning centres while other ‘efficiencies’ would further unravel institutions with ‘mergers’ or take-overs, like the Institute of Education by UCL. Management buy-outs or corporate buy-ins are also possible, plus further cost-cutting measures like the closures of under-recruiting/ researching departments that are already happening, or like the attack on pensions in the older universities. In the newer ones there might be more two-year ‘degrees’ taught over four terms. All this would fragment what is left of a more or less coherent HE system. But, if the punters are willing to pay, why not? And, anyway, what else is there for them to do? Answer: become an apprentice!
Matthew Hancock, then-‘Skills’ Minister at the Department of Business Industry and Science, declared in a DBIS press release 12/5/14: ‘university or apprenticeship will be the new norm’ for all 18+ year-olds. Cameron and Osborne have since repeated pie-in-the-sky pledges of three million ‘apprenticeships’ young people will be forced onto by scrapping their benefits. Similarly, Ed Miliband promised his 2014 Party Conference to ‘ensure as many school leavers go on apprenticeships as go to university’. With the raising of the participation age (in school, FE or employment with training) to 18 this year, this policy consensus presents all English school-leavers with just two options – ‘apprentice’ or student.
This is not viable for reasons Martin Allen and I explained previously in PSE summarizing our latest report on apprenticeships. For a start, about 40% of 18-21 year-olds are students while only 10% at most are ‘apprentices’. More fundamentally, most employers don’t really need apprenticeships and if they do they run them themselves. So, as was widely reported, when the Coalition gave employers ‘ownership’ of state-subsidized apprenticeships this resulted in less places – especially for young people. Also, despite the lavish advertising for apprenticeships, most 18 year-olds who qualify know they are better off with a 2.1 degree (which most get nowadays) for hopes of the secure and at least semi-professional employment to which they aspire.
As well as class and ethnicity, there is an important gender dimension to all this since young women now constitute c.60% of all undergraduates (although this percentage would be reduced by excluding courses in education and health – but not medicine and law where women make up c.70% of students). Women are generally better qualified for university entry than their brothers, and also possibly more motivated to live away from their parental home for three or four years before – predictably for the majority – returning there. So students who have qualified want the full student experience and this is one reason the anticipated uptake of local study has not so far materialized, despite the scrapping of maintenance grants in 1999.
There are also fewer alternative opportunities open to young women than to young men. Although women comprise the majority of ‘apprentices’ as well as of students, many of these subsidized temporary work placements are in office, sales and services – stereotypically female areas of employment. Young women soon become aware therefore that this is often Another Great Training Robbery. For these and probably other reasons, young women are applying, passing and graduating from HE in larger numbers than ever before. Yet, even after endless internships (the graduate equivalent of an ‘apprenticeship’), female graduates are even more likely than males to end up overqualified and underemployed. Women are therefore in the vanguard of the Lost Generation, running up a down-escalator of depreciating qualifications.
This plays oddly into the new policy consensus on apprenticeships to include growing the still centrally-funded STEM subjects of science, engineering and maths to support productive industry. At one end, this means state support for academic-industrial/medical complexes sponsored by Big Pharma and the corporations. At the other, University Technical Colleges and various other links with schools, FE and training widen participation to technician level undergraduate STEM courses. Both Coalition and Labour therefore advocate more UTCs while supporting a privately sponsored Technical University of Hereford specialising in manufacturing, defence engineering and agro-technology.
Such plans are related to the need for devolution of the overly centralized market-state revealed by the Scottish referendum. Thus Willetts’ successor in charge of HE was renamed the Minister of Universities, Sciences and Cities. However, England lacks culturally coherent regions of the mainland European type and they will not be constituted by Cameron and Osborne’s rush towards directly-elected mayors as the optimal administrative arrangement for privatised local government services integrated with a no longer National Health Service.
Meanwhile, ‘One Nation’ Labour’s two nation education policies are complemented by a Technical Baccalaureate for the half of 14+ school students who don’t make it onto the academic route. This will lead on to two-year ‘Technical Degrees’ that reinvent Foundation degrees in FE colleges rebranded as ‘Institutes of Technical Education’. This bipartism will channel young people failed by academic schooling into inferior vocational options.
Students and parents however are well aware of the social hierarchy of subjects and institutions. Many can see that, as Colin Waugh writes,
‘nominal HE is being differentiated (for example, by the concentration of research funding) into a posh bit that workers pay for from their taxes but from which they are largely excluded as students, and another bit which is increasingly vocationalised and privatized and, also, for those reasons, pushed into what is in effect a single FE (or nominally FHE) sector.’
Many also recognise that grades in mainly literary academic examinations function as proxies for more or less expensively acquired cultural capital. Even if that awareness is dimmed by institutional advertising echoed in mass culture to claim ‘knowledge is power’ to ‘make your dreams come true’/ ‘be what you want to be’/ ‘fly’, etc. This is belied in the social sciences and humanities where what you know is becoming less important than how you speak and write (and especially spell!). At the top of the university hierarchy this results in the much complained about dominance of a privately schooled elite over nearly all areas of public life.
The fundamental problem is that university promises of ‘employability’ – like those of schools and colleges – cannot guarantee employment. So, fundamentally the perception of ‘the problem’ needs to change from seeing education as preparing students through apprenticeships or degrees for occupations that may not exist when they complete. Instead, a common general but not academic schooling up to age 18 should be linked to the assumption of democratic citizenship with entitlement to free post-compulsory further, higher and adult continuing education at any point thereafter.
Ainley, P. & Allen, M. (2010) Lost Generation? New strategies for youth and education, London: Continuum.
Allen, M. & Ainley, P. (2014) Another Great Training Robbery or a Real Alternative for Young People? Apprenticeships at the start of the 21st century. London: Radicaled.
McGettigan, A. (2013) The Great University Gamble: Money, Markets and the Future of Higher Education. London: Pluto.
Though £4 billion of the increase came from credit card spending, £9 billion (around 46% of the increase) came from student borrowing, with PwC estimating graduates who started courses after 2012 will owe an average of £40 000 to £50 000. Student loan repayments are linked to salary levels –currently there’s a £21 000 threshold and because many university leavers will never earn graduate salaries, some estimates suggest that up to 40% of this debt will never be fully paid off.
Nevertheless, while these long term debts affect future borrowing potential and the chances of getting a mortgage, a 2014 analysis by Citizens Advice showed more young people turning to pay day lenders to finance their immediate expenditure (this accounted for 62% of the ‘high-interest’ credit used by under 25s) and that 10% of all those with serious debt problems were in the 17-24 age group.
The Citizens Advice report also revealed that 1 in 3 of young people with ‘serious financial problems’ are in work –showing that while youth unemployment may be officially falling, pay and the work that jobs young people do, remain serious issues. The under 25s have suffered most from the economic downturn, with the Institute of Fiscal Studies (press report 04/03/15) showing their incomes are still 7% down. Meanwhile according to a Social Market Foundation Report, 25 to 35 year olds have experienced a 36% drop in savings since 2005. Locked out of the housing market, neither are young people likely to be able to build up any financial equity.
At a more general level, PwC reports the total debt (including mortgage lending) to income ratio now stands at 172%. This is also the highest ever recorded. A future rise in interest rates could have untold implications.