A survey of 2,000 18 to 24 year olds for the Money Advice Trust by YouGov found that 37% are already in debt, owing an average of £2,989 excluding student loans and mortgages.

Some 51% of adults under 25 said they regularly worry about money and 21% said they have lost sleep as a result.

The report found credit cards, overdrafts and loans from family and friends all feature strongly in young adults’ borrowing habits.

Young women with credit cards tend to owe more than their male peers, on average holding £926 in credit card debt, compared with £790 for men, while men tend to have bigger overdrafts – £1,436 versus £941 for women.

National Debtline, run by the Money Advice Trust, said too few young people are seeking expert advice on managing debt and borrowing.

In its ‘Borrowed Years’ report published today, the charity offers a series of measures that could help under 25s manage their money and avoid financial difficulty. They include:

• earlier and more co-ordinated financial education,
• timely support for first-time borrowers,
• a larger role for employers in supporting young workers’ money management and;
• practical reforms to student finance payments.

Joanna Elson OBE, chief executive of the Money Advice Trust, said: “With many young people beginning to build up debts soon after they turn 18, we have a real battle on our hands as a society to make sure they receive the support they need.  This is particularly important given the widespread worry that money issues are causing to under 25s.

“This support should range from ensuring they are provided with basic financial skills, timely support when they first apply for credit and practical reforms to student finance payments to help those at university to manage their money well.

“Worryingly, far too few under 25s are seeking advice when they fall into difficulty.  If we let this situation continue, there is a real risk that young debts will become old debts, with the financial prospects and life chances of young adults being negatively affected as a result.

“It is crucial that anyone struggling to cope with their debts seek free advice from a debt charity like National Debtline straight away – as the earlier you seek advice, the quicker and easier the problem will be to solve.”