Frontpage News 2016 50,000 young peopl...

50,000 young people are caught in a debt trap – mobile phones are the main culprits

14 March 2016

​50,000 or every 20th young person in Denmark is caught in a debt trap and registered as a bad payer in the country’s largest debtor register, RKI. Overall, young people default on debt worth around DKK 1.4 billion. Every third referral to RKI comes from an information or telecommunications company.

To avoid more young people ending up as bad payers, the Danish Bankers Association has joined forces with the Association of Mathematic Teachers in Denmark and created Danish Money Week (Pengeuge). The aim of Money Week is to increase children and young people’s financial understanding by teaching in maths to the oldest classes in Danish schools. Money Week kicks off this week from 14 – 18 March in 600 schools across Denmark.
 
”The fact that every 20th young person in Denmark is caught in a debt trap is not just a problem for individuals but also for society as a whole. Having debt baggage as a young person makes it more difficult to have healthy personal finances in adult life,” states the Deputy Chief Executive at the Danish Bankers Association, Louise Mogensen.
 
Young people in debt live across Denmark. However, Region South Denmark and Region Zealand in particular are home to a lot of young people registered in RKI.


 
Figure 1: national average by region

Note: the figures show that young people who are in debt live all over Denmark. But South Denmark Region and Zealand Region in particular have a lot of young people in RKI.
Source: calculations by the Danish Bankers Association on the basis of data from Experian.
 
”The aim of Money Week is to equip young people so they can deal with their personal finances early on in life. This is needed across Denmark and we can see that there are large regional differences between where young debtors live. We can reach all corners of Denmark with Money Week,” Louise Mogensen says.
  

Mobile phones are the main culprits

Young people are defaulting on debt worth approx. DKK 1.4 billion. Figures show that young people owe money to the information and communication sectors, including telecommunication, in particular. Here, the overall sum amounts to DKK 300 million and more than every third referral to RKI comes from an information or telecommunications company. 

 

Figure 2: RKI registrations amongst young people by branch
Note: the figures show the distribution of RKI registrations by branch among young people aged 18-30, November 2015
Source: calculations by the Danish Bankers Association on the basis of data from Experian.
 
”Something suggests that it is especially mobile phones that are the main culprit when young people incur debt,” Louise Mogensen says and continues:
“We can all be tempted by the latest IPhone or Samsung, and mobile phones are a status symbol for many young people. Therefore, they are willing to go the extra mile to get one– and there are plenty of special offers. With Money Week we are trying to inform young people about the best ways to save up and how to avoid debt,” Louise Mogensen concludes.
 
 
Further information:
Head of Media Relations at the Danish Bankers Association, Stine Luise Hansen
Tel.: +45 3016 1009
 

 

Practical information:
Money Week runs in week 11 from 14-18 March. A range of Denmark’s bank CEOs and advisors are guest teachers.
See more on Money Week at:

Pengeuge.dk (available in Danish)
 
 
Figure 3: young people registered in RKI in relation to all young people by region
Note: the figures show the number of young people between 18 and 30 years old, who were registered with at least one referral to RKI by the end of November 2015 in relation to the overall number of young people in the region concerned.
Source: calculations by the Danish Bankers Association on the basis of data from Experian.
 
 
Figure 4: young people registered in RKI in relation to all young people by municipality
Note: the figures show the number of young people between 18 and 30 years old, who were registered with at least one referral to RKI by the end of November 2015 in relation to the overall number of young people in the municipality concerned.
Source: calculations by the Danish Bankers Association on the basis of data from Experian.
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