Debt Awareness Week 2024: Breaking down debt advice barriers part 1

By Richard Lane, Chief Client Officer, StepChange

This week marks the start of our tenth annual Debt Awareness Week, during which we work with our partners, the media and the public to reduce stigma and increase understanding of the debt landscape and how to get help with debt.

Ten years in, it’s still an uphill battle — misconceptions and fears abound, and there are some thorny barriers that can prevent people from taking action and getting the help they need. Research published last year by the Money and Pensions Service (MaPS) looked in detail at the barriers and motivations that affected whether people sought debt advice and concluded that much work is needed to help people over these perceived hurdles.

This Debt Awareness Week, we’re focusing on five of those barriers and what it might take to break them down. Today’s blog will look at the first two barriers and we’ll be profiling the final three on Wednesday this week.

Barrier 1 — Not knowing about or understanding what debt advice is

When you work in debt advice, you know it’s a structured process and what it involves. But if you’re new to debt and have never experienced the advice process, as the MaPS research found, you may feel trepidation about what to expect or you may not believe it is designed for you or can help you.

Research that we commissioned from YouGov back in December 2023 suggested that one in two people (49%) were worried about their financial situation. However, only 4% of these had taken advice from an independent organisation like StepChange or Citizens Advice. The MaPS research suggested that a reframing of debt advice was needed to encourage a cultural shift. We agree — our “Mixed Messages” research over the past two years outlines some of changes to language and framing needed, both by creditors and within debt advice, to make the concept of debt advice more attractive and accessible. We have also supported the FCA’s proposals to require firms to effectively communicate to customers the potential benefits of free and impartial debt advice.

Barrier 2 — Mental health conditions

Debt and poor mental health reinforce each other. Being in debt is bad for your mental health; having poor mental health can make it more difficult to take the steps needed to address your debt. Around half of all StepChange clients are experiencing poor mental health at the time they take advice. Yet we know advice helps: our clients routinely tell us they feel more able to cope and sleep better following advice. Measures such as effective early engagement by creditors with those who are struggling using an empathetic approach can help more people experiencing poor mental health to get the debt advice they need, and measures such as warm referrals that involve creditors and advice agencies working together for the good of vulnerable clients can improve outcomes for them and the likelihood of both their financial and mental health benefitting.

Keep your eyes peeled on Wednesday for the second installment of our Debt Awareness Week blog series, where we’ll be looking at three more barriers to getting debt advice.