Spiralling debts, fuelled by pressure from social media, saw Alyce Hanman plunged into debt – as a new report reveals that one in four young adults face a similar plight
Alyce Hanman got her first credit card the day she turned 18, but within just two years she had amassed a huge £14,000 of debt.
Now 25, she says she hid her struggle from her parents, in spite of living with them. She told how, at times, her debt repayments left her with just 30p from her salary to last for a month – forcing her to resort to yet more credit to contribute to household bills, pay for food and healthcare, and buy bus tickets to get to work. She told the Mirror: “I had a monthly salary of £1,100 and after I’d spent that I used to max out my credit card every single month too.
“At first, I made sure to pay it off in full. But about three months later, I got an email saying: ‘You’re eligible to up your credit limit,’ and I thought: ‘Oh, amazing, brilliant, we’ll do that.’
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“So my limit went up to £900, then £1,300, then £2,000. And that’s when things began to spiral out of control, because I couldn’t pay it off in full – only the minimum payments. So I started taking out other credit cards and payday loans. I had an overdraft with a £4,000 limit, and I used that. And as the credit available to me grew more expensive, the repayments climbed higher and higher. I felt awful. I had credit but no cash for anything, so when my friends asked me to transfer £5 for a night out, I couldn’t.”
Alyce is far from alone, with new research showing one in four young adults are lumbered with debt – with a worrying number saying it has triggered suicidal thoughts. Social media and its promotion of lavish lifestyles, expensive brands, and the pursuit of money has been partly blamed. And the problem has been made worse by easy access to credit, including buy-now-pay-later loans that are heavily plugged by online retailers.
The findings come from a Money Talks report launched by the website MoneySuperMarket and the Campaign Against Living Miserably (CALM). A survey found nearly eight out of 10 young people aged 18 to 24 say they have used credit cards, overdrafts or short term loans. But just over one in four young adults aged 18 to 24 are in debt as a result. Of those, one in three admit to feeling isolated, and a worrying one in 10 say they have had suicidal thoughts over debt repayments in the past year.
The research hinted at the role of social media in influencing young people’s spending, with one in two saying they felt pressure to act a certain way because of others’ behaviour online. Forty percent admitted there was also pressure to spend more than they can afford to keep up with lifestyles on social media, while almost half said felt like a failure when they saw others’ social media posts.
It is a view echoed by Alyce, who says: “I was working in retail at the time, and I wasn’t as well paid as some of my friends, but I felt a lot of pressure to keep up with them, both on social media and in real life. We went on a lot of nights out, and we were all into the same fashion brands. If someone posted something on our WhatsApp group, we’d all go out and buy it. I really wanted to feel part of that.”
Remembering back, she says: “My first credit card had a limit of £200. I took it out because I wanted to go to a festival, but I had no money. So I searched for payday loans on the internet, and I came across credit cards. I didn’t have much awareness of credit before I turned 18, I didn’t have much financial education at school or college. I’d heard characters in films and TV shows talk about debt, but I didn’t have a clue what impact using credit could have on my credit score. After that, I would take my credit card everywhere.”
Describing what it was like to be in so much debt, Alyce says: “My friends were all doing exciting things like going traveling and buying houses and buying nice cars, and I’d see all their pictures on social media. Meanwhile I was paying off bus tickets from three years ago. I felt like I couldn’t get away from my debts. I struggled to sleep and felt like a ton of bricks was crushing me from the minute I woke up every morning. I was on autopilot a lot of the time, and I was isolated from my friends because I couldn’t afford to go out with them. I would spend money to make myself feel better – but then the problem would grow worse.
“My mood was so low that in 2019 my mum – who still had no idea what the problem was despite us being close – suggested I go to the doctor, who prescribed me antidepressants. They helped, but my debts were still there. By the time I was almost 20, I had built up £14,000 in debt. It felt like it had just spiralled up out of nowhere. There were days when I would be paid, and after all of my repayments had gone out, I’d be left with 30p for the whole month.”
Alyce, from Gloucester, says that despite her struggle, she didn’t want to put a burden on her parents by telling them about her money worries, and was concerned they would feel they had to help pay off her debt. She finally told her mum, she did so by email.
“My mum wasn’t angry, I think she was just so sad for me. She was the one who put me in contact with StepChange, because I had no idea what to do next. At the time my monthly salary was about £1,200, and my monthly repayments must have been about £1,300. My biggest single debt was the overdraft, and then I had six or seven credit cards. I had taken out a £4,000 loan just to cover the minimum payments on my cards, which were swallowing all my money every month.
“StepChange helped me to arrange an IVA (Individual Voluntary Arrangement) and as part of that, I agreed to pay £150 a month over a five year period. But as time went on, my income improved and I saved, so I actually managed to pay it off after three years instead of five. I really felt then like I had learned my lesson.
“Then slowly after a while I started turning to credit cards again. My first one after the IVA had a £400 limit and wouldn’t cover a lot – obviously my credit score was awful. At first I was paying it off every month, but then things snowballed again. I started avoiding my bank statements so I didn’t know for sure how much debt I was in. Finally on Christmas Eve, I decided to check my bank statements, and my total debt was £9,300.
“I was horrified, and felt so disappointed in myself. As well as spending on my credit card, I had used buy-now-pay-later schemes a lot. I was so fed up with owing money, and so at that point I decided that was it – I was going to clear my whole debt. So I took out £1,000 in savings that was meant to be for a house deposit, and paid that off my debt. “Then I ran through my whole wardrobe and sold about £600 worth of stuff. And I’ve been putting aside £600 of my salary each month to pay off debt. I’m at £5,200 now and already I feel so much better about myself. I’m hoping to be debt free by December.”
Kara Gammell, personal finance expert from MoneySuperMarket said: “Young adults today find themselves in an incredibly challenging financial situation. Social media is creating a sense of financial pressure, both to keep up with aspirational lifestyles today and to achieve a certain level of monetary success in the future.
“Meanwhile, young people are using credit to afford day to day costs with many telling us they feel ill equipped to manage their use of credit and their credit score. This means it is now more important than ever for young people and the trusted adults in their lives to talk about money, and sign post trustworthy information about credit scores to help build the foundations for their financial future. These conversations are vital – both in helping young people to avoid a continuous cycle of debt, and in breaking down the stigma around money worries which can stop people asking for help when they need it.”
Simon Gunning, chief executive of the Campaign Against Living Miserably (CALM), said: “We know there’s a clear link between debt, poor mental health and suicide, and it’s alarming to see that one in 10 young people in debt have experienced suicidal thoughts in the last year as a result of the money they owe. We’ve heard from young people that they want to learn more about financial management and the options available to them and so we’re working with MoneySuperMarket to improve financial literacy among young people, to help them take control of their financial futures and avoid costly financial decisions that can take a toll on their mental wellbeing.”
Despite young people’s concerns, only a third of those in debt felt able to confide in a parent or trusted adult. MoneySuperMarket’s Money Talks website provides resources and tips from experts for young people and adults they trust. Meanwhile, CALM’s Money Talks hub offers support for mental strain that money worries can cause.
