People, places, and problem debt
: understanding personal borrowing and personal contexts for young adults from 2006 to 2018 in England, Wales, and Scotland

Student thesis: Doctoral ThesisDoctor of Philosophy (PhD)


Young adults in the UK are borrowing more credit and doing so younger than any previous generation. Consumer credit, a relatively modern phenomenon, is increasingly utilised by households, with overall household debt sitting at 127% of income in 2019. Moreover, the growth of consumer credit has outpaced GDP over the past decade (FCA, 2020). Young adults are especially vulnerable as they are entering adulthood, a phase of the life course defined with coping with new responsibility and is increasingly complex and non-linear in comparison with the experiences of previous generations (Furlong et al., 2018: Arnett, 2004). With their newfound financial responsibility, young adults face a myriad of credit options, including formal loans, student loans, and credit cards. Many types of personal borrowing are tied with life aspirations such as completion of education and housing independence (Houle, 2014). For those where the financial obligations feel unmanageable, the debt becomes problematic and can damage their health (see, for instance Sweet, 2018). The existing literature on personal borrowing focusses on individual-level behavioural characteristics, such as self-control (Gathergood, 2012a) and financial literacy (French and McKillop, 2016;Lusardi and Mitchell, 2013), with financial education often proposed as a way forward. However, as has been pointed out (see for instance Davies et al., 2019),the existing literature does not provide sufficient space to incorporate the personal contexts why an individual borrows and how borrowing subsequently affects their life aspirations.

This thesis addresses these gaps by examining whether, and to what extent, personal contexts explain the uptake of certain categories and types of personal borrowing. It also analyses how different categories of personal borrowing play into the decision for homeownership for young adults, a key indicator for future lifetime wealth. Personal context as defined by one’s personal circumstances, the period of time, and the type of places one lives. The thesis employs quantitative methods (i.e., descriptive statistics, cluster analysis, and regression modelling) and uses unique geocoded longitudinal microdata – the Wealth and Assets Survey (ONS, 2021)– covering England, Wales and Scotland from 2006 to 2018.

Overall, there is evidence that adults facing difficulties managing consumer credit are not necessarily living in areas of highest deprivation. Instead, there is a growth of those individuals finding managing consumer credit challenges living in ‘middling’ type of neighbourhoods. The results provide evidence that the type of places where one lives has an association with their likelihood of taking on categories of personal borrowing; that some categories, but not all, of personal borrowing have an association with the timing of homeownership for young adults; and that certain patterns of consumer credit consumption are prone to be problematic. The thesis therefore supports future research to consider the importance of personal context when evaluating individual’s personal finances, especially for young adults, and to stress that those who find managing consumer credit problematic can be overlooked because they live in so-called ‘average’ neighbourhoods. 

Date of Award24 Jan 2023
Original languageEnglish
Awarding Institution
  • The University of Bristol
SupervisorDavid J Manley (Supervisor), Richard J Harris (Supervisor), Sara V Davies (Supervisor) & Sharon B Collard (Supervisor)

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