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T he importance of d ebt advice

T he importance of d ebt advice. Colin Kinloch 9 December 2013. Our statutory role. Assisting members of the public with the management of debt, Working with other organisations which provide debt services , with a view to improving

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T he importance of d ebt advice

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  1. The importance of debt advice Colin Kinloch 9 December 2013

  2. Our statutory role • Assisting members of the public with the management of debt, • Working with other organisations which provide debt services, with a view to improving • (i) the availability to the public of those services; • (ii) the quality of the services provided; • (iii) consistency in the services available, in the way in which they are provided and in the advice given. • Financial Services Act 2012

  3. Causes of over-indebtedness Life events are the biggest trigger of indebtedness But macro factors can also influence attitudes and behaviours For some, it is a gradual change • Cost of childcare increasing or children staying at home longer • Maintaining a chosen lifestyle in a time of low rates of income growth • Balance between luxury and necessity • Having a baby • Financing a home • Death of a partner • Redundancy • Sickness • Disability • Increasing cost of living • Wage freezes • Reduced working hours • General lack of confidence • Reduced consumer spending And for many, a new life event is coming…… For some, there is a general acceptance of living in debt Some are in debt due to poor financial management • Family and friends in the same situation • Resignation that it will ‘always be like this’ • Too much owed on credit cards • Still paying back a large personal loan • Poor budgeting • Depending on payday loans • Missing creditor payments Sources: IFF User Needs research, YouGov Effectiveness research, MAS Foundation Research

  4. Debt in the UK – the overall view • Estimate that 8.8m people are over-indebted • 75% are under 45 • Half have a household income <£20k • 41% work full time • 48% own their home (with or without a mortgage) • 27% rent privately • 66% find keeping up with bills a heavy burden • 64% have fallen behind with credit commitments in the last 3 months • 76% would describe themselves as being in debt • 42% have been chased by creditors in last year • One third are young people Sources: Public Knowledge / Experian Segmentation Research

  5. Prison & probation

  6. Where we work YOI Brinsford YOI Swinfen Hall HMP Bedford, HMP Birmingham (Winson Green) HMP Hewell HMP Featherstone HMP Shrewsbury HMP Blundeston HMP Bure Source: Optimisa advice effectiveness research

  7. Satisfaction Source: Optimisa advice effectiveness research

  8. Overall situation Source: Optimisa advice effectiveness research

  9. Positive impact Source: Optimisa advice effectiveness research

  10. Actions Source: Optimisa advice effectiveness research

  11. colin.kinloch@moneyadviceservice.org.uk

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