Insights ¦ The Motivations and Barriers to Seeking Debt Advice

Key Take Aways

1. A significant proportion of people who could benefit from debt advice do not seek help, with equal numbers of non-seekers and seekers reporting disengagement.
2. Main barriers to seeking debt advice revolve around shame, embarrassment, and feeling overwhelmed, especially among vulnerable groups.
3. Low financial literacy and debt not being perceived as a priority exacerbate reluctance to access debt advice.
4. Misunderstanding the role and benefits of debt advice, coupled with distrust and negative perceptions, hinder engagement.
5. The research identified key touchpoints along the debt journey where interventions can prompt earlier advice-seeking behaviour.
6. Interventions such as journey maps and money health checkers significantly increase the likelihood of seeking debt advice earlier and more frequently within simulated scenarios.
7. Behavioural experiment results demonstrate that targeted solutions can increase the overall propensity to seek debt advice by around 20 percentage points.
8. Overarching recommendations include reframing debt advice, simplifying processes, boosting visibility, and increasing consumer control over the debt journey.
9. A cultural shift in how debt advice is presented—akin to “financial doctors”—can reduce stigma and foster a more open perception.
10. Emphasising positive outcomes of debt advice, such as improved financial wellbeing and reduced stress, can motivate engagement.
11. The importance of early intervention through community touchpoints and trusted messengers is stressed to help individuals recognise their situation sooner.
12. Tailoring support to individual preferences, offering flexible levels of control, can improve trust and engagement with debt advice services.

Key Statistics

• In the survey, 40% of participants expressed not being behind on essential bills, yet many reported experiencing arrears for utilities, rent, council tax, and credit.
• There was an equal split between non-seekers and seekers of debt advice, with most non-seekers not considering themselves in problem debt.
• 52% of survey participants were unaware they were in problem debt based on MaPS criteria.
• Among advisers and stakeholders, a large majority reported a recent increase in demand for debt advice, alongside decreases in resources and staffing.
• The behavioural simulation showed a significant increase in advice-seeking: 34.6% in control group versus 54.0% with journey map and 49.1% with money health checker.
• Both solutions notably prompted earlier advice-seeking, with a statistically significant impact (p < .001).

Key Discussion Points

• Overcoming emotional barriers like shame and stigma is crucial to increasing engagement with debt advice.
• Improving financial literacy, especially among vulnerable groups, remains a key enabler for earlier help-seeking.
• Effective solutions must address misunderstandings about what debt advice can offer and how it works.
• Building trust through transparent communication and positive framing can mitigate distrust stemming from negative past experiences.
• Interventions such as real-life debt stories and simplified document checklists can foster self-identification and reduce overwhelm.
• Emphasising the benefits of debt advice—such as mental health improvements and clearer financial control—can motivate individuals to seek help.
• Integration of debt advice within community settings and accessible referral pathways can facilitate earlier intervention.
• The research shows that behavioural nudges, like journey maps and health checkers, can significantly influence decision-making by prompting prompt action.
• Reframing debt advice as a pathway to financial ‘health’ might help shift perceptions away from crisis management towards wellbeing.
• Offering tailored levels of support based on individual control preferences can foster trust and reduce drop-out rates.
• Inflated perceptions of inflexibility or fear of losing control are significant deterrents, highlighting the need for more person-centred, flexible approaches.
• A cultural transformation—presenting debt advisers as empathetic ‘financial doctors’—can help destigmatise seeking support and encourage earlier engagement.

Document Description

This article provides a comprehensive briefing on the motivations and barriers influencing individuals’ decisions to seek debt advice. It details research commissioned by the Money and Pensions Service, employing qualitative and behavioural experiments to identify key hurdles and potential solutions. The report offers strategic recommendations for financial institutions and service providers to enhance early engagement with debt advice, emphasizing personalisation, trust-building, and cultural change to improve financial wellbeing across diverse populations.