Two in five young adults struggling with debt

Nearly two in five (37%) young adults in debt are finding it hard to pay it off, according to a two-year study by non-profit organisation Fair4All Finance.

The research shows that almost 45% of young people have money troubles due to poor health, little income, low savings or big life changes, e.g. losing a job.

Relying on credit

In the past year:

• 29% of 18-24-year-olds have taken on more debt
• 22% have been turned down for a loan or credit card

Of those who weren’t able to get a loan or credit card:

• 24% have had to cut back on essential expenses.
• 25% have even skipped meals due to rising living costs.

The study also revealed that 35% of this age group turned to buy now, pay later (BNPL) at least once in the past six months. They’re also more likely to take out BNPL loans than traditional credit cards, while most (61%) said their financial decisions are already affecting their future goals.

The savings safety net

In the past two years, 31% of youngsters have relied on their savings. But a similar amount (30%) have no savings at all, putting them at a disadvantage when unexpected costs crop up.

Around one third (32%) of young people are already feeling stressed about managing housing expenses, such as rent. And with good reason – nearly half (48%) of young renters faced a rent increase in the past six months.

With soaring rents, insufficient savings, and worries about meeting basic living costs, many students and young workers risk financial instability, which can also affect their overall wellbeing.

Do you need help with debt?

A growing number of people are falling into BNPL debt. Since September last year, 12% of the people we’ve supported have been under the age of 25.

Many of those we’ve helped have shared that talking to us feels like a burden has been eased. If you reach out to us, we can create a free budgeting plan for you to stay on top of your costs or give you free advice around managing your money.

Our free advice is available online or over the phone on 0161 518 8285. We’re here Monday to Friday 8am to 8pm, and over the weekend between 10am and 4pm.