Over two-thirds of young people have taken debt to keep up with the high cost of living, according to MoneyTransfers.com.
Data shows that the average person in debt is 18-34 years old, and the most common types of debt taken out are personal and payday loans.
This could lead to long-term financial difficulties, as high amounts of debt can affect credit scores, thus making it difficult for those in debt to get a mortgage or loan in the future.
Jonathan Merry, MoneyTransfers CEO, said: “Life is becoming unbearable to young people in Britain. The cost of living is rising, but wages are stagnating.
“This is creating a perfect storm for debt. What’s even more worrying is that many young people are turning to high-interest payday loans to make ends meet.
“This could have a devastating impact on their financial future.”
With recent tax hikes, wage growth stagnating, and gas prices rising, people are taking home less money.
According to the Office for National Statistics, 23,997 (individual voluntary arrangements) IVAs were taken out in the first quarter of 2022.
The number of people taking out DROs (debt relief orders) increased to 6,629 in the same period.
Separate official data indicates that, during the past year, there were between 6,300 and 7,800 IVAs registered per month.
