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Debt’s early grip:

The challenges facing young adults

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The latest report in our client insights report series – "Debt’s early grip: The challenges facing young adults" – focusses on the experiences of clients aged 18-24 who are experiencing financial difficulty.

 

About the report

This report delves deeper into the demographic and debt profiles of 18-24 year olds, as well as the wider issues affecting those in this age group, to provide a more rounded picture of some of the early financial challenges they face. This report also looks at how young adults perceive and understand debt problems, which can influence who they seek help from. We also explore the role of social media in influencing how young adults manage some aspects of their finances.

Findings from this report

1) Around one in four young adults are in some form of financial difficulty

Research commissioned by StepChange from September 2024 found that around one in four (23%) 18-24 year olds are in some form of financial difficulty, which StepChange analysis, using ONS data, estimates is around 1.3 million young adults.

The proportion of 18-24 year olds experiencing some form of financial difficulty is lower than the proportion among all UK adults (32%), nonetheless it is still very alarming that so many young adults are burdened with financial difficulties so early on in their life.

Almost one in four UK adults aged 18 to 24 are in financial difficulty

2) Unemployment is a driver of debt problems for young adults

Young adults are more likely than other age groups to face unemployment and work-related instability, and this resonates in the main reasons for debt cited by clients aged 18-24.

‘Unemployment or redundancy’ ranks as the most common reason for debt among 18-24 year old clients, cited by one in five (20%), whereas among all clients it ranks as the third most common reason, cited by one in seven (14%).

One in five young adults cited unemployment or redundancy as their main reason for debt

3) Young adults value the informal financial guidance that family can provide

More than a half (51%) of young adults mentioned that they did or would consider consulting family for advice if in financial difficulty or needing financial guidance. Family was the number one source of financial advice and guidance among young adults.

Among young adults, family ranked higher than money advice organisations, friends or colleagues, financial advisors, and social media (and many others). Young adults viewed family as trustworthy and they also valued their families previous experience and knowledge, and them being supportive and understanding.

Over half young adults would turn to family with help with financial difficulty

What’s next?

The challenges young adults face are vast, so better support is needed at this early stage to protect young adults from falling into a rabbit hole of debt problems, which can quickly spiral without appropriate support.

Public policy reform is needed to better support young adults establishing themselves in the adult world. Better support is needed especially for young adults that find themselves in financial difficulty, so they can keep out of debt and not be trapped in a vicious cycle of financial worries in the future.

Download the report

Want more information?

Email us to discuss 'Debt’s early grip: The challenges facing young adults' at policy@stepchange.org