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Parents may want to take out a loan to pay off money owed, after the leader of the Liberal Democrats Nick Clegg has warned that youngsters face a bleak future riddled with debt.

Speaking at a Youth Parliament event, Mr Clegg said: "We've been addicted to debt and now we're having to go cold turkey," adding that the economy is in its current mess because of people's poor spending habits.

However, a secured loan could be one way for households to wipe the sheet clean and pay off any outstanding money owed, which may ensure a brighter future for their youngsters.

"Every one of us is going to borrow money at some point in our lives. To buy a home. To buy a car. To afford university. We need to know how it works," he told the audience.

Mr Cleggs comments come after AXA advised that putting ten per cent of a monthly wage away may leave individuals with a cash pot to spend on Christmas presents.

But whether they are used to fund this holiday season, pay off debt or to buy a large purchase such as a new car, secured loans may have a lower annual percentage rate than other loans on the market.