Context

In September 2024, nearly one in four 18-24-year-olds were in some form of difficulty, and in the first half of 2024, nearly 9,400 clients aged 18-24 years old completed debt advice with StepChange debt charity. Just like the wider population of young adults, StepChange clients aged 18-24 may have underlying vulnerabilities which contribute to financial difficulty, and poor financial confidence and resilience. Understanding young adults’ circumstances, how they perceive and understand debt problems and how their behaviour is influenced is important for understanding the financial challenges young people face.

The report refers to ‘young adults’ and young clients’, both of which were defined as being aged 18-24. ‘Financial guidance’ was defined as general information, advice, and recommendations to help people make informed decisions about managing money which was unregulated and not specific to someone’s particular circumstances.

The study

This study was undertaken by StepChange to address three research questions.

1. Which demographic attributes and financial challenges characterise young adults seeking debt advice from StepChange?
2. How do young adults understand debt problems and financial advice?
3. How does social media influence financial behaviours among young adults?

The study used two sources of quantitative data:

• client data from 9,373 young adults who had completed a debt advice session with StepChange for the first time, online or by phone, between 1 January and 30 June 2024
• survey data from online YouGov polls commissioned by StepChange in May and September 2024, providing a representative sample of 2,112 and 2,111 UK adults respectively (including sub-samples of 187 and 148 young adults).

Some of the survey responses (to open-ended questions) were analysed qualitatively and illustrate the findings in the report.

Key findings

• Demographics and financial challenges of young clients: Compared with all clients, young clients were more likely to be unemployed (18% vs 11% of all clients) with 28% lower incomes and were more likely to be living with family (37% vs 13%).
  • 51% of all young adults had family as a source of financial guidance, valuing that they were trustworthy, knowledgeable and understanding.
  • Low income was cited as a reason for experiencing difficulty keeping up with bills and credit commitments for the first time as young adults.
• Young adults’ understanding of debt problems and financial advice: 27% of all young adults lacked knowledge about where to find money advice (vs 14% of all UK adults). 21% of young adults also said they lacked knowledge about what money advice organisation do.
• The role of social media: 9% of all young adults said they already did or would use social media for money guidance. They valued social media for the personal and relatable information, range of perspectives, practical tips and anonymity it offered.
  • 28% of young adults said they had started or increased saving, and 21% that they had started or changed their approach to budgeting, as a result of social media.

Points to consider

Methodological strengths or limitations:

• Samples from the YouGov survey were small overall, and the authors note that sample sizes for individual questions were smaller still due to filtering.
• Insufficient details of the YouGov sampling, survey method and questionnaire design are given to assess the robustness of representativeness of the findings.
• There is no indication that statistical confidence was considered when reporting differences, some of which were comparatively small.

Applicability:

• The findings should be of interest to a wide range of stakeholders with interest in the financial wellbeing of young people, including policymakers, employers, higher-education institutions, and organisations that provide money and debt advice.
• Although the findings from StepChange client data are reliable for that population, the survey findings should be treated with caution as they may not be representative of and generalise well to other young adults.

Relevance:

• The findings are important because they highlight the financial challenges that young adults face today and which, if not adequately addressed, risk being perpetuated into their own futures and those of the cohorts of young people who follow closely behind.

Generalisability/transferability:

• The findings which relate to StepChange’s young clients should transfer reasonably well to young adults who sought debt advice from other, similar UK charities.