More than a third of young people have debts of almost £3,000 and experience significant concerns about money.
A survey of 2,042 people aged 18 to 24 conducted for the Money Advice Trust by YouGov found that they borrowed using credit cards, overdrafts and loans from family and friends.
Just over half said they regularly worried about money, with 32% feeling their debts were a “heavy burden”.
Women were much more likely to worry about money than men, the survey found.
The average debt of £2,989 excludes student loans and mortgages. The average student loan balance is £25,505.
National Debtline, run by the trust, says that too few young people are seeking free advice from debt charities when they fall into financial difficulty.
It has published a new report called Borrowed Years, which outlines measures that could help under-25s to better manage their money and avoid financial problems. They include:
- earlier and more co-ordinated financial education
- timely support for first-time borrowers or credit card holders
- a wider role for employers to support money management for young workers
- practical reforms to student finance payments
Joanna Elson, the trust’s chief executive, said: “With many young people beginning to build up debts soon after they turn 18, we have a real battle on our hands as a society to make sure they receive the support they need.
“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.
The research found that most young people try to manage their personal finances effectively.
More than two thirds (69%) of 18 to 24-year-olds have set a budget that they try to stick to and 71% check their account balance online at least once a week.
However, 37% of those in debt say they do not have a plan to repay what they owe, and 42% said they have found managing their money more difficult than expected.