The report on young people’s experiences of using credit found some did not always know that they were actually using credit (e.g. Buy Now Pay Later). Researchers suggest this may be due to how certain products are marketed on social media by financial services and FinTech providers. However, it may also be a coping method, used by young people to reduce the fear of taking on debt, or the risk of becoming indebted, due to a lack of financial education. Researchers also found certain groups of young people are more likely to have negative credit experiences. Some do not have fair access to borrowing for their future: e.g. apprentices compared to university students. Others have to borrow for essentials such as rent or food. The report calls for a National Living Wage for apprentices and under 23s in work.

The report also calls for the following changes to enable young people to manage their credit better:

  • Banks, lenders and Fintech refine money-management products and services, and improve their reach, to help young people manage their credit and financial well-being.
  • MaPS should review financial education for young people, particularly around credit, working with schools, universities, employers and specialist organisations providing financial education.
  • The Government should address broader financial policies around income and spending, to tackle factors beyond young people’s control, which make managing credit more difficult. Greater certainty, and support, are needed to help young people to meet essential bills such as the cost of housing and utilities to avoid the use of credit.

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