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'Grim' financial future for graduates

Nigel Morris,Home Affairs Correspondent
Monday 18 September 2006 00:00 BST
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Graduates in their twenties and early thirties face a grim struggle over the next decade to make ends meet, a report warns today.

Rising taxes, student debt repayments and pension contributions means they will soon be handing over almost half of their income to the state. As a result they will also find it difficult to save or, with property prices still rising steeply, to afford their first home. The bleak picture of the growing debt mountain is painted by the think-tank Reform, which calls for urgent government action to tackle the crisis .

Last year Reform labelled them the "iPod generation - Insecure, Pressurised, Over-taxed and Debt-ridden" but says their position has further deteriorated over the past 12 months.

It describes new plans to reform the state pension as a further hammer blow to young people as they will have to bear the costs of more generous state pensions, pay their own personal pensions - and retire later.

The effect, Reform calculates, will be to push the tax burden from 2012 for the average young graduate - who will soon be leaving university with debts of £20,000 - to 48 per cent before their everyday living costs are taken into account.

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