Young people are looking in desperate ways to make ends meet.
New figures show that 42% of Millennials, the generation born between the 1980s and the mid-1990s, have turned to alternative finance, including payday lenders and pawn shops in the past five years.
The figures come from a survey of more than 5,000 Millennials in the United States by PriceWaterhouseCoopers and the Global Financial Literacy Excellence Center at George Washington University.
Reports show that Millennials are also heavy users of UK payday loans. A 2014 report from the Financial Ombudsman Service showed that customers complaining about payday lenders were much more likely to be in the 25-34 age group than any other.
Millennials are heavy users of payday loans
The PwC study showed that a third of Millennials are very dissatisfied with their current financial situation and 81% have at least one long-term debt, such as a student loan or mortgage.
That’s before they get charged with interest on a payday loan of up to 2,000%.
“They have already maximized everything else and they will therefore adopt a behavior deemed even more risky,” said Shannon Schuyler, Head of Corporate Responsibility at PwC.
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The report also found that nearly 30% of Millennials are overdrawn on their checking accounts and more than half have a credit card.
Millennials aren’t the only generation to suffer from rising debt. Earlier this week, the Bank of England released a report showing household borrowing increased as Christmas approached. The monthly consumer credit cash flow increase for November 2015 is the highest since February 2008.