A person is considering the options to take a payday loan in Helsinki. LEHTIKUVA
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Young Finnish citizens are taking on more debt to meet their daily expenses, and many are concerned about their ability to repay, according to a survey commissioned by OP Ryhmä. The research revealed that the financial burdens of those aged 16 to 25 have surged, with over half accruing additional debt in the past year.
A significant component of this youth debt stems from student loans, with 64% of respondents reporting they’ve taken such loans.
This trend aligns with broader observations: in 2022, the average student loan debt for OP’s clients was around €10,000 per student, mirroring figures from Kela, the Finnish social security institution. This is a significant leap from 2010 when Kela’s data indicated an average student loan amount of just over €5,000.
“While student debt is fundamentally considered ‘good debt’ that facilitates future goals, many young individuals are anxious about their financial trajectory, influenced partly by rising interest rates,” stated Aki Gynther, head of personal banking at OP.
Credit card and consumer loan utilization among the youth remains consistent with past patterns. “Within the last year, there’s been an uptick in young people’s credit and consumer loans, mirroring the trend seen across our broader clientele. Payment defaults have also seen a modest rise,” continued Gynther.
Despite the mounting debt, the belief in a brighter financial future among Finnish youth appears to be dwindling. Over one-fifth (21%) anticipate a worsening of their personal financial situations, while nearly a third (29%) predict a further increase in their indebtedness.
“Most young people feel they are currently managing their debt repayments well. However, almost a third are apprehensive about their capacity to continue doing so in the future,” Gynther added.
Regarding credit card and consumer loan limits, the utilization rates among young people are lower than those of families and working-age individuals – a promising sign.
Furthermore, the survey shed light on young Finns’ spending habits in relation to their income. November and December emerge as the months where expenditures are at their peak, often draining the savings accumulated throughout the year. “Broadly speaking, young people are not able to amass savings. On an annual scale, it appears that all earnings are spent,” Gynther observed.
To mitigate their financial struggles, young Finns are seeking additional work. 22% have reported taking on more overtime in the past year, 10% have acquired a second job to cover rising expenses, and 20% have considered finding secondary employment. Another 17% have pondered taking on overtime in hopes of boosting their earnings.
HT
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Source: www.helsinkitimes.fi
