Young people need to be educated in ways to manage their money more effectively if the UK is to reduce its personal debt burden, Liberal Democrat leader Nick Clegg has claimed.

Speaking to the Youth Parliament today (November 19th), Mr Clegg has warned that in the 11 years since Labour rose to power, the personal debt mountain in the UK has risen to one trillion pounds, with overall debt repayments totaling more than 3,000 pounds a second. He warned that unless action is taken now, the young people of Britain will inherit a legacy of debt.

Among the recommendations made by the Lib Dem leader was the launch of a nationwide educational campaign run by the BBC through all its media channels in order to alert young people to the dangers of falling into debt and inform them of effective ways to make sure that they are in control of their money.

For those who have seen their financial commitments spiral in recent months, taking out a debt consolidation loan may be an effective way to get back on a firmer footing. By extending repayment responsibilities, Britons could find they are left with more disposable income at the end of each month, thereby reducing the likelihood of missing repayments and incurring further penalties.

Meanwhile, Mr Clegg promoted the establishment of a network of free advice centres to provide information to those young people who fear that they may be getting into difficulty financially. In addition to warning people about the problems of extreme debt, the facilities could also be called upon for advice about tax credits, benefits, pensions and repossessions. He also urged UK financial institutions to make a commitment to safeguarding the financial future of todays youth by putting forward 50 per cent of the investment necessary to build and staff these centres.

Commenting on the current economic circumstances witnessed in the UK, Mr Clegg explained: “One of the reasons why the economys in such a state at the moment… is because of all this debt. It is our young who will inherit this legacy of debt. Weve been out in the shops spending, weve been going on holidays, weve been buying cars all on borrowed money. Suddenly – the banks cant lend us money any more. And the value of our homes is dropping. So everyones stopped spending. Weve been addicted to debt and now were having to go cold turkey [...] My point is this: we must not hand on this addiction to you.”

For those who have lost their financial footing in the recent economic turmoil, taking out a debt consolidation loan may provide a lifeline in a sea of rising repayment demands. In applying for this type of loan, consumers could also find they are able to budget more effectively as they are left with more disposable income at the end of the month. According to the Fair Investment Company, setting out a stringent budget can be a highly effective weapon in the battle against the credit crisis.

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