Debt advice delivers improved outcomes for people with ‘unmanageable’ debt
People with high levels of debt are seeking out financial advice and are seeing benefits from doing so, according to our survey commissioned by the Money Advice Service, an independent organisation that provides free, unbiased money advice across the UK.
Getting advice works
The results of the survey show that a majority of people (58%) who had unmanageable debt took advice. For them, it has a positive effect and helps break the debt cycle:
- Individuals with unmanageable debt who have sought debt advice are almost twice as likely to have their debt become manageable within 12 months compared to those who have not sought advice
- These people are more likely to remain out of debt in the future than those who reported their debts were manageable and didn’t take advice
- Even people who consider their debts to be manageable see a greater reduction in their levels of debt if they seek advice
Types of advice given
The most frequent type of advice recommended is a debt management plan (48%), followed by a repayment plan (32%). The majority of debt advice organisations are perceived as ‘helpful’ with the exception of creditors, such as banks and utility firms, who are thought to offer the least helpful advice. It was found that there is a high correlation between creditor pressure and seeking advice among those who have experienced unmanageable debt.
‘Get advice, and get it early’
“The UK has a well-established network of advice for people with tough debt problems. The record shows how dedicated debt advice professionals have helped people turn their lives round and get back on financial track,” said Caroline Siarkiewicz, Money Advice Service Debt Advice manager.
She continued: “There’s so much more we can and need to do given the scale and depth of the problem. That’s why we’re working with the sector to develop best practice, create consistency and examine how we can improve performance even more with a clear focus on client outcomes. The message to people in debt remains: get advice and get it early.”
See the full report here
And click here for information on the Money Advice Service