Tuesday 24 January 2017
New findings released today show that free debt advice gives those in problem debt the helping hand they need to tackle their financial situation, pay off their debts and build money management skills for the future.
The early findings released today from a major study by the Money Advice Service, show that within three to six months of receiving regulated advice, nearly two-thirds (65%) of those with debts are either repaying them or have repaid in full. This means that people’s debts are cleared in a way that’s manageable and affordable for them.
Free debt advice helps to improve financial capability by giving people the knowledge and confidence they need to deal with financial difficulties. After receiving advice, 89% check their income and expenses regularly and 85% are more likely to open their post. In addition, 86% had a plan to pay their bills in priority order and 84% keep to a spending plan.
The findings show that resolving problem debt also has a positive impact on other aspects of people’s wellbeing:
· 73% of people feel less stressed about dealing with their finances after advice;
· 62% of people are sleeping better;
· 63% of people feel their mental health has improved;
· 55% of people report better physical health:
· 69% of people also said that their relationships improved; and
· 71% are now performing better at work.
For those who are struggling with problem debt, free debt advice can be the make the difference they need to get back on top of their finances. 94% of people who agree to take at least one action follow through with this and over half (55%) take all the actions agreed. Over two-thirds say the advice resolved their problems completely or to a great extent.
These positive results have been made possible by the Money Advice Service working collaboratively with debt advice partners across the UK to work out how to collectively encourage more people to engage with free debt advice. The Money Advice Service has provided these organisations with additional funding of £6.9 million to support an extra 125,000 debt advice sessions to increase access to their services during the busy January – March period and beyond*.
Sheila Wheeler, Head of Debt Advice at the Money Advice Service, says:
“High quality advice can have a transformative effect on people’s lives – improving their finances and overall well-being. Increases in financial capability are particularly welcome as is the evidence that people are able to build better relationships with their creditors after debt advice. They also reinforce previous reports from MAS and confirm the earlier assessment by the National Audit Office that MAS commissioning of debt advice achieves value for money.
“These results wouldn’t be possible without the hard work and dedication of our debt advice partners. There is important work still to do if we are to ensure that as many clients as possible reach the best possible outcomes and this will be our area of focus over the coming months as we develop our new debt advice strategy.”
A summary of the findings is available here.
For more information, please contact:
Money Advice Service Press Office
020 7943 0593 or 07767 438 670 / email@example.com
NOTES TO EDITORS
To view the Debt Advice Evaluation annual report summary, click here.
*About Money Advice Service Debt Advice
The Money Advice Service is the largest funder of free debt advice in the UK. This is delivered through the following partner organisations:
England and Wales
- Citizens Advice
- East Midlands Money Advice
- Money Advice West
- Greater Merseyside Money Advice
- Scottish Legal Aid Board (SLAB)
- Citizens Advice Northern Ireland
- StepChange Debt Charity
- Money Advice Trust
** Money Advice Trust found that an estimated one in three Britons predicted to borrow money to finance Christmas -based on YouGov survey of 2,000 people – full story available here
About the Money Advice Service
The Money Advice Service is an independent organisation. It gives free, unbiased money guidance online at moneyadviceservice.org.uk or via free phone on 0800 138 7777. Debt advice is also provided through a variety of partners across the UK. The Service was set up by Government and is paid for by a statutory levy on the financial services industry, raised through the Financial Conduct Authority. Its statutory objectives are to enhance the understanding and knowledge of members of the public about financial matters (including the UK financial system); and to enhance the ability of members of the public to manage their own financial affairs.