A new report from Fair4All Finance shows that 37% of young people aged 18-24 are finding it tough to pay off their debt because of high living costs and low wages.
The report highlights how difficult managing money can be for young adults.
In the last year, 29% of 18-24-year-olds have taken on more debt, and 22% have been turned down for loans or credit cards. Because of this, nearly one in four have had to cut back on essentials, and 25% have even skipped meals due to the rising cost of living.
Almost half (45%) of young people are in financially risky situations. High rents and unstable jobs, like zero-hours contracts, are making things worse, with 48% of renters having seen their rent go up in the last six months.
Another major issue is a lack of savings. About 30% of young adults say they have no savings at all, leaving them vulnerable to unexpected costs. A third (32%) are already worried about how they’ll afford their rent.
The report reveals that 35% of young people have used buy-now-pay-later services in the past six months. Although these options may seem helpful, they carry risks and could lead to “high-cost credit habits,” which the report warns could hold young people back financially from an early age.
Fair4All Finance is encouraging young people who are struggling to get free financial advice from places like their local Citizens Advice or charities such as StepChange and National Debtline. Credit unions can also provide helpful support for managing money, building savings, and accessing other financial services.
Report calls for more financial education
The findings emphasise the need for better financial education to help young people face these challenges and become more financially resilient.
Diane Burridge, Interim Director of Development at Fair4All Finance, said: “Through no fault of their own, a lack of financial education can leave many students and young professionals vulnerable and struggling to make informed decisions about their money.
“The stark reality is that many students are heading to university this year worried about how they can afford their next meal and pay rent at the end of the month. For some, these money worries could make or break their studies and hold their careers back when they’ve barely started.
“Credit unions can be a lifeline for young people navigating the challenges of budgeting, saving, and borrowing responsibly, by offering financial education and accessible services. Stronger financial education is not just about budgeting; it’s about giving young people the confidence to pursue their ambitions.”
Fair4All Finance was set up in 2019 to tackle financial inclusion and help people struggling with money. It is funded by the Dormant Assets Scheme.
