Disadvantaged young people can also find themselves struggling to access benefits due to complicated telephone systems and inconsistent local services, the study says. The research, due to be published next month, was based on a YouGov poll, desk research and a qualitative study of young people using Rainer's services.
It showed that four out of five young people surveyed have debts and half of these had debts of more than £2,000, with one in five owing more than £10,000. Now the charity is calling for young people, particularly care leavers, to be given more support with financial management and for a more joined-up approach to finance and debt from services.
Joyce Moseley, chief executive of Rainer, said: "Most young people say if they are in debt they turn to parents or close family for help, but the young people we deal with can't do that."
Rainer's research also highlights problems with crisis loans from benefits agencies. Moseley said young people using Rainer services often found themselves able to access loans once or twice, before being refused any more money. "One thing that got criticised was the tele-claiming of benefits," Moseley said. "You have to go through a phone system and young people often didn't have landlines or enough credit to stay on hold while they were waiting to be connected."
Recommendations from the research included jargon-free advice for young people, consistent guidelines for crisis loans and social fund claims, and support for care leavers as they make the transfer from having money provided by the local authority to no funding whatsoever.
Social exclusion minister Gillian Merron said: "Inconsistencies in services are down to a number of reasons. If we are going to support people who are harder to reach we have to work around them, not expect them to work around us."