Nearly half a million young people are struggling to cope with the cost of running their mobile phone, according to new research from National Debtline, run by the Money Advice Trust. Newly-published findings from the charity’s Borrowed Years research, based on a survey of 2,042 18 to 24 year olds conducted online by YouGov, reveal a significant minority of young people are struggling to meet mobile phone bills, with some missing payments and turning to borrowing to cover the cost.
The findings come in the run up to Christmas, which sees many customers upgrading their handset and entering new mobile phone contracts. The research shows that mobile phone costs are causing financial challenges for a significant minority of 18 to 24 year olds.
· Around one in twelve 18 to 24 year olds (8.5 percent) ‘regularly struggle’ to pay their mobile phone bill or top up mobile phone credit – equivalent to an estimated 485,000 young people.
· Of those 18 to 24 year olds who have a mobile phone contract, eight percent have missed at least one monthly payment in the last year
· Seven percent of all 18 to 24 year olds say they have borrowed money from a friend or family member in order to pay a mobile phone bill
The findings show that many 18 to 24 year olds end up paying more than they expected on running their mobile phone, but reveal mixed views on value for money.
· On average, 18 to 24 year olds spend £21.88 a month on their mobile phone
· More than a quarter (27 percent) report that what they currently pay on their mobile phone is higher than they had expected
· More than two thirds of 18 to 24 year olds (68 percent) feel that 24 months is too long to be locked into a mobile phone contract
· Despite this, there are mixed views on value for money, with 61 percent of 18 to 24 year olds agreeing they receive good value for money for what they pay, and 30 percent disagreeing
Around one in 10 calls to National Debtline involve telephone debts, with more than 18,000 people who contacted the advice service last year holding this kind of arrears – up from around one in 25 calls in 2007.
National Debtline says the findings highlights the need for action from the mobile phone industry and its regulator, Ofcom, to improve support for customers who are struggling – including earlier intervention, making greater use of repayment plans and working more closely with debt advice charities.
The charity has also called for mobile phone companies to build budgeting tools and information on money management into their websites and in-store processes, to help improve the financial capability of younger customers in particular.
Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline, said: “A mobile phone is often one of the first financial commitments that young people take on in their lives, and the vast majority will do so without any problems whatsoever. However, for nearly half a million 18 to 24 year olds, keeping up with the cost of running a mobile phone is a real challenge. Mobile phones are no longer a ‘nice-to-have’ but an essential part of everyday life – and we need to make sure that anyone struggling to cope with this or any other household bill receives the support they need.
“There is undoubtedly more that mobile phone companies can do to help customers who are struggling – by intervening at an earlier stage, referring people to free debt advice and making greater use of repayment plans. For younger customers, the industry also has a golden opportunity to help boost financial capability in the UK by building budgeting tools and information on money management into their websites and at the point of sale in stores.
Previous research for National Debtline found that 37 percent of 18 to 24 year olds are already in debt, owing an average of nearly £3,000 (excluding student loans and mortgages), with 51 percent regularly worrying about money and 21 percent losing sleep as a result.