Record numbers of young people are struggling with debt - we need joined-up action: Paul Mason

Yorkshire debt charity StepChange supported more than 170,000 clients in 2024, with notable spikes in January and March this year. More homeowners and higher earners than ever before are seeking help, and perhaps most concerning, a record number of 18 to 25-year-olds are in financial distress.

This paints a clear picture that personal debt is no longer a problem confined to a small segment of society - it has become mainstream.

For young people, the pressures are immense. They are navigating stagnant wages, rising rents, spiralling energy costs, and often carrying the additional weight of student debt. Meanwhile, social media has amplified the culture of comparison.

With relentless pressure to keep up with influencer-driven lifestyles, it is not surprising that our youth are turning to borrowing to bridge the gap between aspiration and reality.

Equally worrying is the rising average income among those needing debt advice, which demonstrates that those earning well above the national median are also struggling to make ends meet. When higher earners, often with mortgages, car finance, and other long-term commitments, are falling into arrears, it is a sign that our financial safety nets are failing.

This matters. The debt problem is growing as the cost-of-living crisis, high interest rates, and lack of financial education put more people at risk. Without action, the crisis will worsen, hitting mental health and communities.

For me, the solution lies in two key actions. We must remove the stigma around debt while focusing on prevention.

Right now, up to 80 per cent of people feel judged for being in debt. That stigma can delay people from seeking help until their situation has reached crisis point. As a sector, we must send a different message. Debt is not a moral failing, and seeking advice early is essential to regaining control.

At Lantern, we have seen firsthand how an ethical, compassionate, and holistic approach can transform outcomes. This means taking the time to understand individual circumstances and offer flexible repayment solutions.

However, we cannot just be reactive. Prevention is essential too, and it starts with improving financial literacy, especially among young and vulnerable people. If we can help the next generation understand borrowing, interest rates, and budgeting before they face these challenges in the real world, we will help build resilience into the system.

We also need to meet people where they are. Platforms such as TikTok and Instagram can amplify financial pressures, but they can also be used to deliver practical, relatable advice. By using these same spaces for outreach and education, we can counter harmful messages.

Finally, collaboration is key. The debt advice sector, financial services, local government, and mental health charities must work together, sharing data, insights, and resources to create integrated support systems. Only by tackling the problem from multiple angles will we make a lasting difference.

By removing stigma, offering ethical support, and building prevention into our approach, we can help people regain financial stability and protect communities from the far-reaching consequences of unmanageable debt.

Because debt is not just a financial issue, it is a societal one and solving it will require all of us to play our part.

Paul Mason is CEO of debt recovery service Lantern