The good buy young

To be in debt is to be a good consumer. Buy a house (with a huge mortgage), drive away in a new car (with a personal loan) and go on holiday (with a credit card). We are so numbed by debt and the vast effort that goes into marketing it that we are failing to spot the colossal financial problems facing young adults.

Students today are going through a giant social experiment. Those graduating this month are the first to feel the full impact of the loss of grants and having to pay tuition fees. The average debt is £10,000, and as Rupert Jones found when interviewing students at Sussex University this week, some have debts as high as £45,000. Even three years after leaving college, most have done little to whittle down their debt burden.

These are the same young, professional adults who are supposed, at some time, to join the property market, take out a mortgage and start saving for a pension.

Perhaps, like some of the people who contact us for advice in our Cash 18-30 column, they believe they can pile one debt on top of another and it doesn't matter.

But there will have to be a reckoning. My own guess is that "generation debt" will inflate its way out of its financial burdens, so I'm highly suspicious that we are in a era of permanently low inflation.

Alternatively, the government might want to do something to alleviate the student debt crisis. If it does - and there's a government review on student funding out this month - the class of 2002 should not be forgotten. They have been the guinea pigs of the debt experiment and deserve to share retrospectively in any funding improvements.