More than 16 million UK adults have now experienced adverse credit, including missed payments, credit card arrears, CCJs and debt arrangements, Pepper Money reveals.

Pepper Money’s Specialist Lending Study shows that rising living costs and financial pressures are driving a sharp increase in credit struggles across the UK, with 30% of UK adults, experiencing adverse credit, the highest figure since the study began nine years ago.

It found that adverse credit is now increasingly common among high earners, with 49% of those earning over £100,000 reporting adverse credit at some point in their lives, compared to 35% of adults on under £50,000.

In the last 12 months alone, 24% of six-figure earners missed a payment, compared to 9% of lower-income earners.

Graduates and postgraduates report higher rates of repayments issues and CCJs than those without formal qualifications.

Meanwhile, the report finds that younger generations are disproportionately affected as 21% of 18 to 24-year-olds missed a payment in the last 12 months, compared to just 3% of those aged 55 and over.

Over a three-year window, 28% of young adults have missed a credit card payment, falling steadily with age to just 4% in adults over 55.

Pepper suggests the findings highlight the pressures facing young adults at the start of their financial lives, combining higher living costs, insecure or early-career employment and limited savings, often alongside weaker financial literacy.

The data shows that credit difficulties are accelerating, not stabilising as more than half of those affected have experienced adverse credit within the last three years.

It also found that 5.57 million UK adults missed at least one bill or repayment in the past year, with 67% going on to miss additional payments, a sharp rise from 46% the year before.

The study attributes the rise in adverse credit to several converging pressures being felt by consumers.

Almost a third (31%) cited sustained cost-of-living increases as the primary reason for having debt followed by a fifth (20%) facing unexpected expenses such as car repairs or home emergencies.

Pepper Money sales director Paul Adams says: “Adverse credit can impact us all, with higher earners reporting higher instances of experiencing adverse, it is increasingly a feature of modern financial life.”

“These figures show just how close many households are to credit difficulty. Rising costs, irregular earnings and shifting borrowing habits are pushing millions to miss payments, which can lead to defaults and CCJs, including customers who have never struggled financially before.”