New research for the Financial Conduct Authority finds that just over a third of those in financial difficulty had used or sought debt advice in the past 12 months.
It also finds a lack of understanding as to what debt advice is and who it is for are among the barriers to those in financial difficulty seeking help from advice services.
The research was carried out for the Financial Conduct Authority by Yonder Consulting. The resulting report - Borrowers in Financial Difficulty - presents findings based on views and experiences collected between October 2021 and March 2022.
In relation to the barriers to using debt advice, the research found that the main barriers relate to a lack of understanding as to what debt advice is and who it is for. The lack of awareness of which organisations offered debt advice and - more importantly - exactly what they were able to do to help someone in financial difficulty was also a barrier.
From the report (p64):
There was a lack of awareness of what support and guidance was available. Despite a latent awareness of some debt advice organisations, there was often little awareness of exactly which organisations offered debt advice, and more importantly, exactly what they were able to do to help someone in financial difficulty. Participants from the qualitative research told us things like they didn’t have other sources of money, so couldn’t see how debt advice could help, and ‘paying my mortgage is my biggest problem, and they can’t help me with paying my mortgage’. Participants in the qualitative interviews highlighted the need for greater clarity on what debt advice is and the solutions it could offer.
Matt Dronfield, Head of Debt Free London, shared his thoughts on the research:
This presents a call to action to free debt advice organisations to step up and proactively reach those in need of help. Debt Free London will be looking at ways we can increase our outreach because this is proof that there are a great many more people out there who could benefit from our free, expert advice.
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