A recent study asked whether financial well-being could predict depression, anxiety, and loneliness in young people a year or two later (1).
In a large sample of 18-29-year-olds, it did. The effects were modest, but significant.
This comes as no surprise to those of us who have ever faced financial uncertainty: you don’t need to wait a year to feel anxiety or depression about the situation. And if you’ve ever had a sudden windfall, you probably didn’t have to wait a year to see your mood improve. It’s not a secret that money can offer a sense of security and freedom, and even jobs, maligned as they are, can provide a sense of meaning and belonging.
Mental health has declined over the past 20 years across in Britain, but youth have been hit the hardest–so much so that happiness no longer peaks during youth, but rises with age (2). At the time when they’re supposed to be having fun, meeting their partner, and starting their career, they’re finding themselves squeezed out of the labour market and priced out of the housing market, in a state of limbo.
As of March 2026, around one million young people in the UK aged 16-24 were NEETs–meaning they were not in employment, education, or training (3). Around 60% are totally economically inactive, meaning that they have given up looking for work. These are high numbers, but they’re not unprecedented–in 2011 17% of young people were in this group.
Yet Gen Z is staying home in greater numbers than previous generations due to skyrocketing housing costs. Thirty years ago in the 1990s, only 25% of 25-year-olds lived with their parents (4). Now, 42% do.
Youth mental health has been in steady decline since the late 1990s. However, there was a particular dip, or a ‘structural break’, in the mental health of young adults after the Great Recession in 2008, which deepened in the following decade with the mass adoption of smartphones (2). This may have to do with the impacts of cyberbullying, body shaming, and just the fact that time spent on phones takes away from positive social activities that support well-being (2).
All of this contributes to greater loneliness: 1 in 20 young people in England report having no close friends today, up from 1 in 100 only a decade ago–a five-fold increase (6).
The psychoanalyst Donald Winnicott said that when the environment fails to hold us, when the economy or social world doesn’t meet our needs, or imposes demands that interfere with our ability to just be or live our lives, the individual experiences a sense of impingement, and a common response is to defensively withdraw. We have a generation of young people whose lives are being impinged upon–on the one hand by markets, on the other by unrealistic expectations set by social media–that won’t let them just be.
Affordable counselling is not a solution to that crisis, but a response to it—one that acknowledges that care should not be a luxury. And counsellors can help people to hold these pressures and challenges in an era marked by loneliness. If you’re looking for affordable counselling, find out more about our low-cost counselling sessions here.
References
Siconolfi D, Tucker JS, Seelam R, Troxel W, D’Amico EJ. Money and the Mind: Financial Well-Being, Mental Health, and Loneliness in a Large Cohort of Emerging Adults. Ment Health Prev. 2026;43:200547. doi:10.1016/j.mhp.2026.200547
Blanchflower DG, Bryson A, Bell DNF. Deteriorating Mental Well-Being of the Young in the UK. Scott J Polit Econ. 2026;e70050. doi:10.1111/sjpe.70050
House of Commons Library. NEET: Young People Not in Education, Employment or Training. Research Briefing SN06705. 2026 Sep 11. Available from: https://commonslibrary.parliament.uk/research-briefings/SN06705/
The Guardian. The Guardian view on ‘kidulthood’: Britain prices young adults out of independent life. The Guardian. 2026 Jul 30. Available from: https://www.theguardian.com/commentisfree/2026/jul/30/the-guardian-view-on-kidulthood-britain-prices-young-adults-out-of-independent-life
Institute for Public Policy Research. The loneliest generation. Cited in: The Guardian. Number of young people with no close friends has soared since 2014 in England. 2026 Sep 1. Available from: https://www.theguardian.com/society/2026/sep/01/thinktank-reports-epidemic-of-loneliness-among-englands-disconnected-young
