A survey by the personal debt advisory group Lowell found that the average Gen Zer was sitting under £5,069 ($6,413) of debt.

Worse still, the research found that 13% of Gen Zers surveyed were more than £10,000 ($12,660) in the red.

The sources of these debts were overwhelmingly coming from credit cards and buy now, pay later loans, in addition to payday loans. 

A perfect storm that’s wreaking havoc on young consumers’ finances appears to have been brewing.

Pandemic-era stimulus helped push up inflation and, accordingly, interest rates. That has begun to weigh on customers, particularly younger ones, who bought items on credit in recent years.

Meanwhile, Lowell argues that the rise of financial influencers, or “finfluencers,” have also misled social-media-using Gen Zers into reckless purchases.

“It’s worth considering that with the rise of social media Gen Z have been, and continue to be, exposed to ‘finfluencers’ offering personal finance advice online,” the authors of the report wrote. 

“This also includes the promotion of certain financial services like BNPL and credit cards.”

Setting up for a bad future?

Unfortunately, early debt takeup isn’t likely to set Gen Zers on the best footing for future financial independence.

According to Lowell’s, which interviewed 1,000 U.K. adults between 18 and 26 years old, 40% of respondents said they weren’t able to save for the future, putting them out of reach of a deposit for a home and other financial landmarks.

“Whilst Gen Z may not have been financially independent for decades yet, it’s still possible that past decisions have already impacted their financial situation later down the line,” the authors of the research wrote.

“In fact, 61% of respondents told us that they believe their current or future financial goals have been hindered by choices made in their younger years.”

Indeed, Gen Zers who took on credit card debt during the high-spending pandemic era are now facing snowballing debt thanks to soaring interest rates.  

Research from Credit Karma, which assessed data from tens of millions of member accounts, suggested Gen Z and millennials were facing the steepest decline in their credit scores.

“This debt is going to keep snowballing and snowballing, so you have to decide what steps need to be taken,” Nicole Gopoian Wirick, a Michigan-based certified financial planner and founder of Prosperity Wealth Strategies, previously told Fortune. “The longer you wait to change your habits, the harder they form.”

It’s the latest obstacle to be thrust at the feet of a struggling generation.

A rising tide of research points to Gen Zers exhibiting significantly worse mental health than their elders.

The Resolution Foundation found that Gen Zers were now taking more sick days than Gen Xers 20 years their senior, a reversal of historic trends driven by declining mental health.

They are also increasingly likely to sit out of the labor market thanks in part to this mental health crisis. Recent data from the ONS showed nearly 3 million 16-to-24-year-olds were economically inactive in the final quarter of 2023.  

There may be hope for battered Gen Z consumers, however. 

A report by TransUnion found Gen Z and millennials had the greatest opportunity for upward mobility in their credit scores, thanks to lenders’ ability to create higher-yielding loan opportunities.