The UK’s younger generations have increased the amount of debt they owe over the last five years according to analysis within Arrow Global’s consumer research report(Table 1). Significant numbers of millennials also don’t know how much interest they are paying (Table 3), according to the 2018 Debt Britain research from Arrow Global.

The findings reveal 40% of 18-24 year olds and 46% of 25-34 year olds have increased the overall amount of debt they owe over the past five years. In comparison, just 20% of 55+ year olds have increased their debt over the same period.

The younger generations are also most likely to take out short-term credit in the form of a payday loan with 12% using these services. This compares to just 7% of adults across all age groups.

Table 1: Personal debt levels over past five years

Age Increased Decreased
18-24 40% 21%
25-34 46% 24%
35-44 34% 35%
45-54 31% 42%
55+ 20% 56%

Table 2: Top sources of debt 2018

18-24 year olds
Student loan 55%
Overdraft 33%
Credit card balance not settled in full every month 23%
25-34 year olds
Credit card balance not settled in full every month 44%
Mortgage 39%
Overdraft 37%

Repaying debt on time is ‘very important’ to 69% of 18-24s and 70% of 25-34s, but significant numbers don’t know how much interest they are paying on their borrowings (Table 3). This lack of financial awareness could raise questions around the affordability of consumers’ future debt repayments especially if interest rates rise as many commentators expect them to do in the future.

Table 3: Top sources of debt where consumers don’t know what interest rate they are paying

18-24 year olds
Student loan 45%
Credit card balance not settled in full every month 29%
25-34 year olds
Overdraft 44%
Credit card balance not settled in full every month 28%

When it comes to managing their finances, younger generations are not concerned about Brexit. 71% of 18-24 year olds and 67% of 25-34 year olds said the vote to leave the EU has not impacted their spending levels.

However, both age groups have already cut back on daily expenses to prioritise their loan repayments including eating out, holidays and clothes purchases.

Table 4: Expenses cut back on to prioritise loan repayments

Expense 18-24 year olds 25-34 year olds
Eating out 47% 53%
Holidays 36% 44%
Clothes 38% 43%

The personal impact of debt is also felt most keenly amongst younger generations. Half of 25-34 year olds report trouble sleeping due to debt worries and almost a third (30%) said they had problems with personal relationships. One in five (21%) also said their output or productivity at work had suffered, and 28% of 18-24 year olds and 23% of 25-34 year olds reported mental health problems, a cause of concern for employers and UK plc that continues to suffer from low productivity rates – a key driver of economic growth.

Table 5: Worries about debt have led to

  18-24 year olds 25-34 year olds 55+
Trouble sleeping 39% 50% 35%
Problems with personal relationships 27% 30% 8%
Mental health problems 28% 23% 9%
Reduce your output/ productivity 19% 21% 6%

Lee Rochford, Group Chief Executive Officer of Arrow Global said “The combination of rising debt levels and low awareness of interest rates among the Millennial generation is concerning and could be a precursor for future debt problems. Our research shows that debt has a detrimental impact not only on those struggling with their financial liabilities but also on their families and workmates. It is important consumers don’t ignore their debts and seek professional advice to help manage their finances and make the right choices in the future. As an industry we need to ensure that if consumers get into difficulty, they are provided with the best advice on how to manage their finances. As a responsible credit management services provider, we focus on helping people manage and repay their debt in a sustainable way.”


*Survey of 2,054 UK Adults (18+) with debt including 546 default payers (including late payers) carried out in February 2018. Research conducted by Opinion Matters.