Better debt advice: from a moment of crisis to a lifetime of resilience

1. Context
2. The study
3. Key findings
4. Points to consider

Context

Debt advice services across the UK operate in a diverse landscape, incorporating a variety of funding and delivery models. The agencies providing debt advice operate diverse cultural and organisational processes.  The sector, whilst demonstrating a range of strengths, also faces a number of challenges, and would benefit from enhancing its delivery practices across the sector.

The study

The Money Advice Service commissioned the study to explore the diversity of debt advice services across the UK, and to identify good practice to be shared across the sector. The main study objectives were to:

• Understand client needs for debt advice, and how well current practice is meeting those needs across the UK
• Identify good practice in supporting clients towards positive outcomes
• Highlight areas for service improvement
• Construct guiding principles for the sector.

 The study used a mixed-method approach, including:

• Observations, data collection and interviews with debt advice providers (200+ hours)
• Qualitative interviews with debt advice staff, including advisers (120+ hours)
• Qualitative interviews/ discussions with current, past and potential debt advice clients (150+ hours)

Key findings

The study identified the following key findings:

Strengths

• At first contact, advisers are empowering clients to improve their financial situation.
• Advisers have a good level of technical knowledge, and empathise with clients, regardless of their situation or circumstances.
• Crisis relief is working well; advisors supporting clients in dealing with emergency issues, and often advocating for clients with creditors and at court.
• Many advisers provide sound benefits advice, although this could be strengthened by advising clients about income diversification or reducing expenditure.
• Advisors enable clients to build their skills and confidence to prioritise debts for payment.

 Challenges

• Advisers sometimes struggle to support clients with complex needs. This limits the potential for services to resolve clients’ financial difficulties over time. For example, many clients identify the ‘root causes’ of their indebtedness to be unresolved issues such as legal problems, relationship breakdown, unemployment, or addictions.
• Some advisers focus on recommending short-term solutions which may not be sustainable or effective in the longer-term.
• Advisers widely report that some clients, even with significant budget cutbacks and income maximisation, struggle to balance their budget.
• Advisers regularly assume that clients are unable to manage their financial affairs, missing opportunities for building clients financial skills.
• Debt advice often focuses on technical administration rather than motivating clients to build their financial skills and confidence.

 The study identified areas for development and innovation, to help tackle challenges facing the sector:

• Increasing emphasis on long-term change: Support clients to make longer-term improvements to their financial capability and their financial situation by encouraging behaviour change in relation to debt and money management.
• Enhancing holistic support: Enable clients to address wider issues, such as relationship breakdown, job loss, mental health difficulties and addiction.
• Improving support to meet client need: Encourage advisers to conduct nuanced needs assessments, recognising the diversity of client situations and capabilities, and supporting clients to develop the skills to manage their money independently.
• Promoting shared responsibility for high quality debt advice: Sharing learning to build an ethos of continuous and collective improvement across the sector.

The research team collaborated with stakeholders, advisers and clients to develop the following service delivery principles to guide sector developments, building on the research findings:

• Future-focused: Ensure clients are supported to progress from dealing with financial crisis to making longer-term change.
• Empowering: Promote a ‘can do’ attitude amongst clients, to regain financial control by developing their skills and capabilities.
• Thorough and personal: Assess client need thoroughly and tailoring advice to each individual.
• Accessible: Present information clearly and simply to help clients access services effectively.
• Positive and proactive: Use positive language to help clients develop their financial capability to move towards financial resilience.
• Efficient:  Allocate resource according to client need, to improve efficiency.

Points to consider

• Methodological strengths: A number of recruitment strategies were employed to meet the broad scope of this study. Initially advice agencies were invited to participate in the study by the Money Advice Service and Revealing Reality. The advice agencies that opted-in then referred clients to the research team. Clients were also recruited ‘live’ in court, as well as via free-find recruitment partners. This multi-pronged recruitment methodology reduced the potential for sampling bias amongst study participants.
• Generalisability/ transferability:  The study achieved a good level of client engagement from across the sector. Activities included follow-up telephone interviews with individuals, tracking 30 clients through their debt advice journey, four ‘vision development’ focus groups with past and potential debt advice clients, and four ‘ideas testing’ focus groups with debt advice clients. This approach ensures the report reflects the views of the target group and that study recommendations will resonate with clients in different contexts.    

Full report

Better debt advice: full report