Understanding the barriers to seeking out debt advice

Sector: Financial health

Team: Edward, Ruth, Namrata, Dan

Partner: Money & Pensions Service

Diagnostic survey

Literature review

Simulation experiment

Interviews

Journey mapping

Understanding the barriers to seeking out debt advice

We took a mixed-methods approach to better understand the barriers to seeking debt advice and test possible solutions.

The Challenge

In 2022, the Money & Pensions Service (MaPS) found that as many as 9.3 million adults across the UK were showing strong indications of needing debt advice. This is an increase of 800,000 compared to 2021, and doesn’t take account of more recent energy bill rises. Amongst other things, this group will be facing serious consequences for not being able to pay a priority bill - such as their rent or energy bill.

Debt advice is now available in many different forms and provides practical and emotional support to those struggling with their debts. Yet millions of people in this group of 9.3 million adults will not seek out help that is available to them, or try - but fail - to get the advice they need. MaPS therefore wanted to better understand the barriers and drivers to people accessing debt advice, and to develop some solutions and recommendations that might help overcome these barriers.

The Approach

In order to examine the barriers and drivers to debt advice, we used three separate methodologies. We conducted a literature review of the behavioural science evidence; we ran a ‘Behavioural Diagnostic Survey’ with 1,003 panel participants in need of debt advice and 117 debt advisors and stakeholders; and we conducted in-depth ‘Discovery Interviews’ with 24 people in need of debt advice, including 9 people in vulnerable circumstances, and 10 debt advisors and stakeholders.

The aim of this first phase was to understand deeply what was preventing people from accessing debt services that they might benefit from. The Behavioural Diagnostic Survey enabled us to get a representative sample of the group we were interested in and the perspective from a range of debt advisors and stakeholders. And the Discovery Interviews enabled us to understand in more detail the challenges faced at an individual level.

These insights then informed the second stage of the project, which was the development of a large scale ‘Simulation Experiment’, in which we immersed 1,507 participants in a realistic scenario involving escalating debt challenges, and ‘Ideas Interviews’ with 12 people in need of debt advice and 6 debt advisors and stakeholders to get feedback on our recommendations. In the Simulation Experiment, participants were randomly assigned to either a Control condition or one of two alternative paths, each of which contained a solution that was aimed at overcoming the barriers we had identified in the first phase.

Figure 1: The journey map and money health checker in the Simulation Experiment

(C) CogCo

The Simulation Experiment is a methodology devised by CogCo in which participants are given a hypothetical scenario and asked how they would behave if they experienced the situation, e.g. if they haven’t been able to pay their phone bill for the last two months. This temporal dimension enables us to understand how people might respond to evolving situations, and whether different solutions are more or less likely to encourage someone to choose a specific option. In this case we want people to choose the target behaviour - to seek debt advice - which is embedded amongst a list of other behaviours.

The Results

Our phase 1 work offered new insights into the debt advice barriers faced by people in problem debt. Some of the barriers to seeking advice included embarrassment about struggling with their debts, finding it overwhelming to think about dealing with their debts, low financial literacy and confidence, dealing with debts not always being the priority and not identifying with the debt problems they are experiencing - many people did not realise that they were in problem debt in the first place. At the same time, those offering debt advice services were seeing significant increases in demand, and particular challenges for the most vulnerable groups.

We used these insights to develop a long list of solutions and shortlisted four potential solutions for testing. We tested two (journey map and money health checker) in our Simulation Experiment, and all the ideas in the interviews. We wanted to know whether people encountering these solutions would be more likely to choose to seek advice sooner, as the Simulation Experiment scenario unfolded. The two solutions, to be tested against a Control condition, were:

A Journey map, which guided people through the debt advice journey, making it simpler for an individual to understand the paths available to help them
A Money Health Checker, which enabled individuals to get a quick and simple idea of their ‘money health’ and to understand what support is available for people like them.

We found that in the Control group, just 34.6% of participants sought debt advice by the end of the simulated scenario. This increased sharply to 54.0% of participants who saw the Journey Map, and 49.1% of participants who interacted with the Money Health Checker. Both of these differences were large and statistically significant. Participants in the two test groups were significantly more likely to ‘seek debt advice’ at earlier points in the simulation than people in the Control group. We also provided a set of overarching recommendations, including reframing the role of debt advisors, making the debt advice journey simpler and more flexible, and creating more pre-advice touchpoints in communities.

The full report on the experiment can be found here

Figure 1: Proportion of people seeking out debt advice in an online Simulation Experiment

Read recommended case studies

How digital design changes customer decisions

Online shopping offers customers a smooth, simple way of making a purchase. But Citizens Advice, the charity that offers confidential financial advice to millions of people every year, is concerned that some firms are designing online platforms in ways that act against the interests of customers. Citizens Advice therefore commissioned CogCo, working with Paul Adams, to devise an experiment that tested what the effect of different aspects of digital design had upon the choices and comprehension of customers. They were especially interested in the effect of different digital designs upon consumers’ decisions to choose to pay using ‘Buy Now, Pay Later’ products. These products enable customers to delay payments into the future and now account for 6% of all online purchases in the UK.

Helping More People to Save for a Rainy Day

Around a third of all people in the UK have less than £100 in savings. This means that tens of millions of people across the country have next to no financial buffer, should they encounter any form of financial challenge. A broken fridge, or an unexpected parking fine, for example, can lead to someone needing to borrow money that they subsequently find it difficult to repay. The team at Wagestream, a financial wellbeing app whose goal is to make money management easier and more accessible for people, recognised the severity of this problem amongst the 500,000+ users of their platform. They asked CogCo to work with them in helping them to build a new product that could help their users build up their financial resilience.

Understanding What Influences Job Decisions: Is Money All that Matters?

Governments and firms regularly grapple with the question of how to attract particular employees to their shores, to different sectors of the economy, or to their workplace rather than that of a competitor. Research intensive firms might want to attract the best scientists. Often just as urgently, there might be a critical need for low-paid employees in sectors in which local citizens are reluctant to work, such as fruit picking in the US and the UK. Or there may be a need to encourage citizens to take up private-sector roles in countries where the public sector is particularly attractive, such as in parts of the Middle East. When considering how to encourage people to move into new roles or locations, governments and firms often focus on extrinsic rewards — the pay, benefits or even visa facilitation that can influence an individual’s decision. But a growing range of research shows that these extrinsic rewards are only part of the picture. Together with the global management consulting firm Oliver Wyman, we set out to explore the other factors that should be taken into account.