Under 30 - and £30,000 in the red

DEBT among young people is soaring, with some under-30s more than £30,000 in the red. Tuition fees, high living costs and tempting credit offers are all adding up, a report warned on Thursday. It means that many in their 20s will be paying off debts until middle age.

The amount owed by the average 20-something has risen by more than a quarter in two years, according to the Consumer Credit Counselling Service, a charity which helps people to manage debt. Debt l faced by the 3,500 young people it is helping had gone up by 28% since 2000 to an average £15,891.

Malcolm Hurlston, CCCS chairman, said more research was needed to find out why young people's debt was 'skyrocketing'. Paying for studies or spending too much on credit cards are among the prime suspects. He said: 'We need to know what is driving young people to rack up debts of over £20,000 and £30,000 in their 20s. It may be the effect of student loans or the introduction of student fees, it may stem from a lack of understanding about how to budget and to determine priorities. Whatever the cause, we need to understand more in order to help them manage credit more effectively.'

He added: 'As we are encouraging young people to fund their education through borrowing, it is important to make sure that their lives are not damaged as a result.'

More than 20% of people who seek CCCS advice are under 30, up from 15% two years ago. Hurlston said large debts accumulated by recent graduates, combined with poor money management skills, high living costs and few savings, meant young people's finances could easily get out of control. 'We think the numbers seeking help could be just the tip of the iceberg, with many struggling alone or borrowing more to pay off existing debts.'

The charity is writing to employers' groups, including the CBI, to alert bosses to the problems some of their younger staff may be facing. The CCCS advises families and individuals in debt and helps them to draw up repayment schedules, some lasting ten years or more. Hurlston said: 'We have clients in their 20s who are on debt management plans which will last until they are in their late 30s. This is not a good way to start off if you want to get married, buy a property, start a family - all the normal processes most of us expect to happen.'

Although the CCCS figures are for unsecured debts only, excluding mortgages, interest rates at their lowest level for decades add to the dangers faced by young people.

The chairman of the Financial Services Authority Howard Davies has warned young professionals that their live-for-today attitude meant many were taking excessively high mortgages and putting too much on credit cards. Davies said well-educated young people were as much at risk from debt as the low-skilled and the elderly, and encouraged schools to teach personal finance skills.