In the W3 Debt Solutions report, the amount of people in their 20s taking out an Individual Voluntary Arrangement (IVA) has soared by 90 per cent in half a year.
“I am very concerned about the sharp rise in IVAs among 20 to 30-year-olds,” said Greg Mullarkey, chief executive of W3 Debt Solutions.
“Living with large debts blights lives and it is sad that so many young people are forming poor budgeting habits at such an early stage in life.”
IVAs are legally binding contracts between a borrower and all of their creditors to repay only what they can realistically afford, with the balance of the debt being written off.
Yet while twentysomethings had the largest rise in the amount of people turning to an IVA, those in their 30s are still the largest proportion, accounting for a third of all such arrangements.
“Our advice to young and old, without sounding too trite, is to live within your means and resist cheap credit, despite its obvious temptations,” concluded Mr Mullarkey, urging proper debt management.