Young adults are quickly building up debts and are making it worse for themselves by not seeking advice, a debt charity has revealed.
A new report by the Money Advice Trust shows that 18 to 24-year-olds are suffering widespread money worries at an early age despite most trying their best to budget.
A YouGov survey of more than 2,000 young adults showed that 37% are in debt. They owe an average of £2,989 – and that’s not including student loans or mortgages.
More than half of adults under 25 (51%) regularly worry about money and 21% lose sleep as a result.
Credit cards, overdrafts and loans from family and friends are all contributing to the amount of debt young people find themselves in.
16% of 18 to 24-year-olds have at least one credit card, owing an average of £856, 15% have an overdraft and are on average £1,180 overdrawn, and 12% are in debt to family and friends by an average of £4,644.
Those with student loans have an extra debt to worry about, with the average student loan balance standing at £25,505.
According to the Money Advice Trust’s study, 69% of adults under 25 have set a budget they try to stick to and 71% log into online banking to check their account at least once a week.
But 42% say they have found managing their money to be tougher than they expected and 37% of those in debt do not have a plan to repay the money they owe.
The Money Advice Trust found that while 63% of 18 to 24-year-olds have asked a parent for financial advice, only 2% have looked for expert advice or contacted a debt advice charity.
Young adults account for 21% of the UK’s over-indebted population but in 2015 only 12% of calllers to National Debtline, a free debt helpline run by the Money Advice Trust, were aged 18 to 24.
Joanna Elson, the trust’s chief executive, said society has a battle on its hands to make sure young people get the help they need.
“This support should range from ensuring they are provided with basic financial skills, timely support when they first apply for credit and practical reforms to student finance payments to help those at university to manage their money well,” she said.
“Worryingly, far too few under 25s are seeking advice when they fall into difficulty. If we let this situation continue, there is a real risk that young debts will become old debts, with the financial prospects and life chances of young adults being negatively affected as a result.
“It is crucial that anyone struggling to cope with their debts seek free advice from a debt charity like National Debtline straight away – as the earlier you seek advice, the quicker and easier the problem will be to solve.”