Low pay, insecure work and housing costs causing debt problems for 18-24 year olds
27 November 2024
New research by StepChange Debt Charity reveals low pay, unemployment and high housing costs are driving debt problems among its clients aged 18-24.
The charity's new report Debt's early grip shows incomes are 28% lower among its clients aged 18-24 compared to all StepChange clients, equating to £490 less per month. With rent taking up around 38% of their net income on average, young clients are left with little ability to build financial resilience.
The findings reveal almost four in ten (37%) of StepChange's young clients seeking debt advice are living with family, which is lower than the proportion of all UK adults aged 18-24 where the figure is around three in five (58%).
Despite a substantial proportion of young clients living with family, an even higher proportion are renting (53%). The financial burden of housing costs is pushing them into debt, with a higher proportion of clients in this age group in debt across all household bills – with the exception of mortgages.
Social media also plays a key role in influencing young adults' attitudes towards their finances. As a result of seeing financial content on social media, almost three in ten (28%) UK social media users aged 18-24 have started saving or increased their savings. One in two (50%) 18-24 year olds have taken action as a result of financial content they've seen on social media – this compares to 27% of all UK adults who use social media.
Vikki Brownridge, CEO at StepChange Debt Charity, said:
"Young adults are bearing the brunt of several years of economic crises. For those just starting out in their careers, or looking to move out of their parents' home, obstacles like ever increasing housing costs, low pay and insecure work are huge barriers, and in some cases are tipping them into problem debt.
"Among our younger clients, even with the majority being in work, this is not sufficient to keep them out of debt – in fact they are more likely to be behind on household bills than all clients as they struggle to cover the basics on a lower income. We welcomed the Government's recent commitment to implementing a single adult rate for the National Living Wage, which will help to close the gap for younger adults and ensure that work pays.
"However, in a climate where even many young people in full time work cannot afford essentials, they are left with little hope of building savings. We need to see the Government ensure Universal Credit is sufficient for young people with low incomes to make ends meet and prioritise reducing the cost of essentials like energy, housing and council tax. The extension of the Help to Save scheme to 2027 announced at the Budget is welcome – we would now like to see the Government incorporate lessons learned from the scheme to increase take-up and help young people with low incomes to save for a rainy day and create a more secure financial future.
"For any young people struggling with their finances, help is available – StepChange offers free and impartial debt advice online or over the phone to anyone over the age of 18. While social media can be a useful tool for getting tips on your finances, it's important to be wary of misinformation or inaccurate advice. Always make sure you're seeking debt advice from a reputable source.”
Notes to Editors
- ‘Debt's early grip: The challenges facing young adults' utilises client data gathered between 1 January to 30 June 2024. The number of clients completing first time debt advice in the first half of 2024 was 94,026, and among this group 9,373 clients were aged 18-24.
- This press release also includes data from YouGov polling which also features in the report Debt's early grip. YouGov polling surveyed a sample of 2,211 adults. Fieldwork was undertaken between 9th - 10th September 2024. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+). The 18-24 year olds subsample comprises of 148 respondents.