New research from debt management firm Lowell into the UK’s borrowing habits has found that the vast majority of people who fall into debt do so while young, with university-aged adults proving particularly vulnerable to early financial strain that can follow them for years afterwards.
The study found that 88% of people currently in debt first fell into it between the ages of 18 and 34, with 51% doing so between the ages of just 18 and 24, the years in which most people are at university or beginning their first jobs.
Among university students, credit cards were found to be the most common entry point into debt. Almost half (46%) of students said a credit card was the first form of debt they took on, while 23% fell into their overdrafts and 17% turned to loans from family and friends.
Contrary to assumptions that student debt is driven by discretionary spending, the research found that essentials were the leading cause. 40% of students who took on debt said it was used to cover essentials such as food, rent and bills, making it by far the most common reason.
Social spending was the second most common driver, cited by 35% of students, followed by emergencies (22%), school supplies (21%) and big purchases such as phones or furniture (also 21%). Travel and holidays accounted for 19% of student debt, while 5% said their debt went towards supporting family members.
| What the Debt Was Used For | % of Respondents |
| Essentials (food, rent, bills) | 40% |
| Social spending | 35% |
| Emergency | 22% |
| School supplies | 21% |
| Big purchase (e.g. phone, furniture) | 21% |
| Travel/holiday | 19% |
| Supporting family | 5% |
The findings raise questions about the long-term psychological impact of student loans on attitudes towards borrowing. While 18% of university students said taking out a student loan made them more cautious about debt, more than double that number (39%) said it instead made debt feel more normal, or made them more comfortable with borrowing.
The research also points to how university life can alter graduates’ finances for years to come. Overall, 17% of students said they still carry debt taken on during their university years. That figure rises sharply among older respondents: 24% of those aged 25 to 44 said they still have debt that originated while they were at university.
“For many people, their first experience of borrowing, whether through an overdraft or a credit card, comes during their time at university. At Lowell, we we’re seeing that financial pressures are making it easier for young people to fall into debt, a concerning reflection of the UK’s lack of meaningful financial education.
“The challenge isn’t borrowing itself. It’s that many young people, some still teenagers, are making some of the biggest financial decisions of their lives before they’ve been given the knowledge or confidence to fully understand how credit works. Without that foundation, debt can easily come to feel like a normal, accessible part of everyday life, rather than a financial commitment with long-term consequences.
“Often, taking out a student loan is their first experience of owing tens of thousands of pounds. Because it’s presented as a routine, almost universal part of higher education, it can quietly reshape their perception of what constitutes “normal” debt. That mindset doesn’t disappear after graduation. It can carry into people’s twenties and thirties, influencing how readily they turn to credit cards or personal loans when money is tight, instead of building savings or developing strong budgeting habits first.”
John Pears, UK CEO at Lowell shares his perspective on student loans and debt: