New research: young adults with poor financial literacy three times more likely to face rough sleeping or eviction 

Finding one: the financial education void

Young adults are entering the rental and housing market without ever being taught how rent, credit scores, deposits or tenancy contracts actually work.  

• Those with the lowest financial literacy scores are nearly twice as likely to experience housing insecurity as those with the highest (57% versus 29%) 

• And the gap widens as the problem worsens: sleeping rough and facing eviction proceedings are both three times more common among the least financially literate.  

• More than a third felt completely unprepared for independent living, and nearly one in four say they’ve never received any financial education at all. 

Every financial education gap, from credit history to deposit protection, represents a moment when the right information, delivered in time, could have changed what happened next.   

Finding two: the debt spiral for essential costs

Once people are struggling, many turn to credit just to keep a roof over their heads.  

• 70% of young adults have used some form of borrowing (credit cards, buy now pay later, payday loans), specifically to cover rent, mortgage or bills. 

• And for most, this isn’t occasional: of those who use BNPL or payday loans for housing costs, 58% do so at least monthly. 

• One in four young people have been rejected for a tenancy or mortgage due to their financial circumstances.  

Short-term credit isn’t only being used for luxuries, as many assume, it’s increasingly used for basic survival. But when used this frequently, there’s a real risk it becomes unmanageable, and that can leave a mark for years to come. 

Finding three: the ‘life on hold’ generation

For those who’ve faced housing insecurity, the knock-on effects are huge.  

• 92% have had to put a major life plan on hold – saving for the future, starting a family, building a career.  

• And for nearly one in five, this isn’t a brief setback but a sustained period stretching well beyond twelve months.  

• Roughly a third say housing insecurity has damaged their mental health. 

This is not a story about a generation putting off ordinary milestones by choice. It is a story about a generation forced to put life on hold, carrying a wellbeing cost that lasts well beyond whichever month the rent was actually short. 

Finding four: the system that isn’t watching

Our Freedom of Information requests expose a system with a blind spot.  

• Financial and benefit-related factors are almost never recorded as a cause of homelessness anywhere in the UK, often existing only in case notes rather than reportable data.  

• Around half of local authorities have a money or debt advice service linked to their housing team, yet even where a service exists, councils rarely track how many people use it or whether it made any difference. 

• Only 31% of young adults who’ve experienced housing insecurity say their council offered them financial support or advice. 

A system cannot prevent what it does not record and cannot know whether its own support works if it never tracks the outcome. 

What we want to change

Every chapter reveals the same gap: young adults aren’t given the financial education they need, the system doesn’t notice when that contributes to them losing their home, and where guidance is provided, nobody checks whether it works. We’ve developed three policy asks directly addressing this. 

Ask 1: Mandatory recording of financial and benefit-related factors as contributing causes in homelessness data systems, across all four UK nations. Prevention starts with knowing what to prevent. 

Ask 2: Statutory money guidance, with outcome tracking, embedded in homelessness assessment and support. So it’s a right everywhere, not a postcode lottery. 

Ask 3: Financial education and capability recognised as a named, fundable prevention activity under the Homelessness Reduction Act 2017, giving councils a legitimate route to prevent homelessness, not just respond once it has. 

The missing money lesson behind homelessness isn’t a mystery. Our report sets out exactly what it is, and what closing it would take. We urge policymakers, local authorities and the wider sector to act on this with us. 

Read the report in full here.