Housing pressures, debt and pandemic scars holding back under-35s from financial independence

12 October 2026

New research by the Personal Finance Research Centre, University of Bristol in partnership with StepChange Debt Charity and funded by NatWest Group, reveals acute housing pressures, debt and lasting pandemic impacts, affecting under 35s.

According to the report ‘Starting out, falling behind’, which comprises StepChange debt advice client data, an online survey, interviews, and nationally representative polling:

• Almost half (44%) of StepChange clients aged 18-34 surveyed have borrowed money to cover their housing costs
• Three in four (75%) StepChange clients aged 18-34 in the survey first used credit before the age of 21
• A third (34%) of 18–34-year-olds in the UK say the pandemic has had a negative impact on their career progression, which compares to just 23% and 16% for those aged 35-49 and 50-64 respectively

Meanwhile, among a slightly younger cohort – only one in two (49%) UK adults aged 18-24 are able to afford basic living expenses from month-to-month, and only one in five (19%) of this age group are financially independent from parents or other relatives, compared to almost three in five (57%) of the wider UK population.

The research also identifies labour market woes such as unemployment, redundancy or reduced income as the leading driver of debt problems among young adults. Furthermore, when asked about income and housing related issues in the past three years, around half (49%) of 18-34 year old clients surveyed were not earning enough to cover their essential costs, even when working, highlighting the financial vulnerability many in this age group continue to face.

Lasting impact of pandemic continues to shape young adults' lives

Six years on from the Covid-19 pandemic, younger adults are still feeling its effects more acutely than any other age group.

Around half (52%) of 18-34-year-old UK adults report that the pandemic had a negative impact on their mental health, substantially higher than the 39% recorded across the wider population.

Cautious attitudes towards using AI for financial advice

While younger generations are often assumed to be the most enthusiastic adopters of new technology, the research suggests many remain cautious when it comes to using AI for financial matters.

Half (51%) of 18–24-year-olds in the UK say they would not be willing to use AI for any financial tasks, broadly in line with the national average of 49%.

However, those aged 25-34 appear more open to using AI as a financial tool. Three in ten (30%) say they would use AI for tasks such as general budgeting advice, compared to two in ten (20%) UK adults overall.

Chloe’s story – StepChange client (age 25 – available for interview)

Chloe’s debt problems started at just 18 after a university withdrawal error. Despite working multiple jobs at the same time, she accumulated more than £20k of credit card and loan debt. She was left feeling overwhelmed and ashamed, keeping the extent of her financial problems to herself.

“Looking back, there were several reasons I got into debt. Credit was easy to access, and I didn’t feel there were enough checks or questions from lenders. I also didn’t learn how to manage money growing up. My dad struggled with money too, so there was no one at home who could really teach me.”

Vikki Brownridge, CEO at StepChange Debt Charity, said:

"For many young people, the promise of adulthood is financial independence, stable work and the chance to build a secure future. Increasingly, however, that aspiration is out of reach. Even for those entering their 30s, huge housing costs are preventing many younger adults from taking important financial steps forward, delaying independence and making it harder to build financial resilience.

“Combined with a challenging jobs market, growing reliance on credit from an early age and continued economic uncertainty, younger generations are facing accute financial pressures. Worryingly, our findings suggest these challenges are even more acute among the youngest adults.

"This report underlines the need for greater support to help younger adults build financial resilience, access affordable housing and get the help they need before debt problems become entrenched so early on in their lives."

Lead author Jamie Evans, Research Fellow at the Personal Finance Research Centre, University of Bristol, said:

“Six years on, young adults are still feeling the legacy impacts of the Pandemic, in terms of their careers, their personal finances and their health and wellbeing. On top of this, cost-of-living pressures are not letting up, meaning that consumer credit is often bridging the gap between income and essential outgoings for young adults. Without early support, these debts can quickly escalate. While recent Government action to support young homebuyers is welcome, this remains out of reach for many and more needs to be done to tackle the fundamental cost-of-living challenges that young adults face.”

Haydn Williams, Head of Financial Health & Support, at NatWest, said:

“This research provides important insight into the financial challenges facing younger adults today and the factors that can shape their financial futures. The findings show how housing costs, income insecurity and early reliance on credit can combine to create significant barriers to financial resilience and independence.

“By bringing together robust research with the lived experiences of people who have sought debt advice, this report gives us a deeper understanding of where support is needed most.

“At NatWest Group, we’re already taking steps to improve education and understanding wellbeing through free Financial Foundations workshops, confidential one-to-one Financial Health Checks, NatWest Thrive, which helps young people develop positive money habits

“We hope these insights help inform action across financial services, government and the third sector, making it easier for young adults to access the support they need, build financial confidence and resilience, and make progress in their lives.”

Notes to Editors

• ‘Starting Out, Falling Behind: Tracing Young Adults’ Journeys into Debt’ has been published by the Personal Finance Research Centre, University of Bristol, in partnership with StepChange Debt Charity, and funded by NatWest Group.
• The research draws on four data sources: StepChange client data for 71,000 young adults aged 18-34 who received advice in 2025; an online survey of around 100 young StepChange clients; interviews with 20 young adults who completed our client survey; and nationally representative polling of 4,200 UK adults, including 829 aged 18-34.
• All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 4,203 adults. Fieldwork was undertaken between 31st August - 2nd September 2026. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).
• Case studies are available on request.