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Under-50s 'taking on more debt and saving less'

The insurance and asset management group AXA has released the latest quarterly results of its "Big Money Index", a survey of eight demographic groups and their attitudes to money. It indicates that fewer people were paying off debts or saving than in the previous quarter.

There was 'a slight rise in confidence in the economy' among those under 50 - particularly 'Young Professionals' (mid 20s and 30s, no dependents, average income, likely to be taking out a first mortgage, low disposable income).

However, much of this confidence is 'funded by borrowing' - 84% have a credit card, 11% borrow on an overdraft and 9% have credit cards or loans. Debt is 'markedly higher' among the 'Modest Middle Years' (late 40s-mid 60s, grown-up children or an elderly relative, average income).

At the same time, less is being spent on debt repayments or savings. Fewer 'Young Professionals' are paying off their overdraft (4% drop from Q1 to Q2), paying off their credit cards or making loan repayments (13% drop from Q1 to Q2).

Those approaching retirement have less confidence in their financial future. Nearly a third of 'Under-funded Seniors' (retired, living in sheltered accommodation, dependent on the state) are having to use their savings and only 5% added more to their savings in the second quarter.

A spokesperson for the IVA Advisory Centre commented:

"Increased optimism in the economy among young people is encouraging in one respect. However, people should remain cautious when borrowing money, as a change in circumstances can quickly make previously affordable debts unmanageable."