insight
Evidence type: Insight i
Qualitative research is more exploratory, and uses a range of methods like interviews, focus groups and observation to gain a deeper understanding about specific issues - such as people’s experiences, behaviours and attitudes.
Quantitative research uses statistical or numerical analysis of survey data to answer questions about how much, how many, how often or to what extent particular characteristics are seen in a population. It is often used to look at changes over time and can identify relationships between characteristics like people’s attitudes and behaviours.
It has been estimated by the Scottish Government that 18% of Scots live in relative poverty. Among the many consequences of poverty is the ‘poverty premium’, where lower income customers pay higher costs to access services than the more affluent. The report explores the causes and manifestations of this poverty premium in areas including energy, telecoms, credit, loans, insurance and others. The study was conducted to help identify recommendations for key stakeholders to show how this financial burden can be lessened for lower income households.
Citizens Advice Scotland (CAS) commissioned Ipsos MORI to conduct independent qualitative and quantitative research. For the quantitative phase, 1,000 Scottish consumers (aged 16+) were interviewed to explore differences between audiences with lower, middle or higher household incomes. For the qualitative phase, depths interviews with 32 low income (defined as earning less than £15,600 per year) were carried out. These were with individuals representing different audiences by age, working status, living environments, etc. This primary research was supported by further quantitative and qualitative evidence from the CAS network, gathered from their bureaux. Findings from all elements of the study are then used to make a range of recommendations on how the poverty premium can be minimised in future.
Energy costs: Low income households are more likely to use pre-payment meters (PPMs), with 27% using a PPM (vs. 12% of middle income and 1% of high income respondents). A fifth (20%) of low income households spent over £100 per month on energy, rising to 24% among those with a PPM. Qualitative research suggests many with PPMs underestimate the price premium that they are paying for energy.
Telecomms use: Access to the internet from home varies by income, with 69% of lower income households and 98% of higher income households having this utility. Although mobile phone ownership was very high (98% across the entire sample), those on low incomes were more likely to be on expensive Pay As You Go (PAYG) tariffs (47% of lower income respondents were on these, vs. 9% of higher income respondents). Not having access to the internet also seems to correlate with switching behaviour between utility providers. Those without access to the internet were less likely to switch (for both telecoms and energy suppliers).
Finance: 53% of lower income respondents were not using credit or loans, whilst 11% of this audience were paying over £100 per month towards credit/ loans. Qualitative research suggests lower income groups may be paying more for their home and motor insurance, and may also be foregoing some types of insurance altogether (e.g. contents) due to the cost.
Impacts: Nearly 10% of lower income respondents had cut back on food expenditure due to their financial circumstances (vs. 1% of higher income respondents), with possible impacts on physical health. Mental wellbeing could also be impacted on, with 30% of lower income respondents experiencing stress because of their financial circumstances (vs. 5% of higher income respondents).
Support and advice: 17% had gone to a CAS bureau for advice in the past, and among those who have not sought advice 40% of lower income respondents and 29% of higher income respondents would expect to use CAS bureaux should they need advice in future.
Recommendations include:
