Gen Z and young millennials are facing financial struggles where their debts are greater than their assets creating a situation usually called "negative wealth."
This situation is making it harder for them to build a secure financial future.
As per The Guardian, a new analysis suggests that this negative wealth is connected to lower income and poorer health outcomes later in life.
The thinktank, Fairness Foundation, advocates for reintroducing the Child Trust Fund, a government savings initiative to help young people build more financial stability and have better stake in society.
The foundation's report, titled No Money, More Problems analyzed data showing that many young adults especially those aged 25 to 34 are in debt with significant portion having debts greater than their assets.
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In particular, one-third of this age group in Great Britain has negative wealth and the problem is even worse in Wales compared to London.
On average, people’s debts have increased by 25% since 2010, mostly due to higher living costs like rent, student loans, and inflation.
A large number of people aged 25 to 34 sought help from StepChange, a debt charity last year.
This group made up one-third of the charity’s clients, even though they only represent 17% of the UK population.
As a result, this group is disproportionately affected by debt compared to their share of the total population.
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