One in 10 coming to Citizens Advice are in the 17-24 age bracket.
Even young people in employment can get into serious financial trouble, as one in three going to Citizens Advice with severe debt problems are in work.
Gillian Guy, Citizens Advice chief executive, said: “Generation Y is fast becoming ‘Generation Credit’. The housing and money pressures on young adults are significant and it is a big concern that one in three young adults in serious debt is employed.
“It is a big concern that so many young adults are turning to some of the most expensive types of loan to get by. Taking out a payday loan in your late teens or early 20s can have significant and damaging consequences for later life.
“Often, high-interest loans end up spiralling out of control and many people in debt end up feeling they have nowhere else to turn other than a vicious circle of more borrowing.”
Other types of credit being used include logbook and guarantor loans. With the latter example others are responsible for the loan if the borrower cannot make repayments.
Guy added: “Young people face the dual challenge of getting a foot on the jobs and housing ladders. It is extremely welcome that the jobs market is recovering and that the number of young people out of work is falling, but problems about jobs and pay remain a big issue for under-25s.
“For young adults, accessing a job and home of their own are key to living independently and too many of those who are struggling to get by, end up in serious debt because of high-interest and dangerous loans.”