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Children 'borrowing from companies'

One in eight young people have borrowed money from companies, a study has found.

Of the more than 1,000 12 to 18-year-olds surveyed for the charity Action for Children, 13% had borrowed from a company or bought an item that needed to be paid for over a period of time.

Of those, almost half (41%) said they had borrowed from a pay-day loan provider.

A third (38%) said they had used high street lenders including store cards as an easy and quick way to access money.

Action for Children said its frontline services saw young people resorting to borrowing money to replace household goods, set up their first home or keep up with their friends.

It said spending over the festive season was one of the biggest reasons young people turn to borrowing.

The study found 55% of children had not received any financial education or did not know if they had.

Of those who had, 87% said they had learnt from parents or carers and 27 said they had learnt about money at school.

Sir Tony Hawkhead, chief executive of Action for Children, said: "High-interest products and companies are now far too easy for young people to access.

"Some young people are less likely to have the financial skills they need, they may have to live on a low income or are not in education. They are also not able to learn about money at home or at school where other young people do.

"Add in baffling financial jargon and a lack of knowledge will dramatically create a vicious circle of debt, increasing the risk of mental health problems and unemployment.

"We cannot afford to let children pay this price because of a simple lack of financial education. They must be equipped with the necessary skills to make informed money decisions to give them a chance of a happy future."

:: One Poll surveyed 1,058 12 to 18-year-olds in August.

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