Free debt advice works for both people in problem debt and their creditors
Posted by: Eden Morrison on January 31 2017 | Tagged:
New findings released this week by the Money Advice Service show that free debt advice works to help those in problem debt tackle their financial situation, pay off their debts and build valuable money management skills for the future.
The early findings 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 study shows that resolving debt issues has a positive impact on wellbeing:
For those who are struggling with problem debt, free debt advice can be 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.
Sharon MacPherson, Scotcash CEO welcomed the report:
“As an organisation committed to helping tackle financial exclusion, Scotcash is aware of the positive impact that money advice and support can have on people’s lives. We welcome the findings of today’s report by the Money Advice Service which reveals the extent to which free fair financial advice can have for both those struggling with debt as well as their creditors.”
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.”
A summary of the findings is available here. The full report Debt Advice Evaluation annual report will be published in March 2017.