Identifying vulnerable communities at risk of being left behind in a cash-lite society

By Daniel Tischer, Sara Davies & Jamie Evans

These days it’s common to hear discussion of the UK being on the verge of becoming a ‘cashless’ society – but, for a range of reasons, this may be premature. For the foreseeable future, a more appropriate term may be ‘cash-lite’. In this blog, Dr Daniel Tischer reflects on our research in South Wales in which we explore a new method for identifying and protecting the most vulnerable communities in a ‘cash-lite’ society.

Much recent commentary suggests that the UK, and a number of other countries, are rapidly moving towards becoming ‘cashless’ societies – but there remain multiple hurdles standing in the way of ‘cashlessness’. One such hurdle is that digital payments do not yet quite match cash for reliability: technical ‘glitches’ too often stop us from paying digitally. The (partial) outage of the VISA network in June 2018, for example, left many Europeans unable to pay by card, and other, smaller-scale incidents are not infrequent either. There are also big hurdles related to consumer needs and preferences, or the unsuitability of digital in certain circumstances (for example, in areas with no / a poor internet connection).

This leads to the conclusion that, in the near future at least, the UK will not become cashless. Rather it seems we are becoming a ‘cash-lite’ society – one in which cash usage is forecasted to decrease to about 1 in 10 transactions by 2028 – mirroring the experience of other low-cash countries, such as Sweden and Canada.

Vulnerability & the poverty premium in a cash-lite society

So what does a cash-lite society mean for consumers? Well for most people, most of the time, there will be few problems – but that does not mean that there are not significant risks that need to be mitigated. As fewer transactions are made in cash, more ATMs will be closed down or switched from free to fee-charging – and, as we saw both in our case study of Bristol’s cash network published in May last year and in national research from Which? in September, the latter of these is an issue which disproportionately affects more deprived areas.

Paying to access cash was a component of the University of Bristol’s ‘poverty premium’ calculations in 2016, albeit a relatively small one, and this suggests that vulnerable communities may be left even further behind. Even a small charge of £1 per transaction present a significant cost to low-income households, especially when only small sums—£10 or £20—are taken out to purchase basic food items or pay bills.

Identifying and supporting potentially vulnerable communities

As our society becomes more cash-lite, there is a danger of increasingly uneven access to cash across the country. This makes it important that we are able to map and identify those areas that are not only losing their ability to access cash but are also less resilient to such changes taking place.

Our second report on access to cash, published in January 2020, therefore advances our methodology from our Bristol case study to identify communities in South Wales that are most ‘vulnerable’ in terms of access to cash. We identify vulnerability in two steps: 1) by considering their current ability to access cash – where AvCash Index scores under 5 highlight communities with a low number of ATMs or other cash infrastructure within a 1km radius; and 2) by taking into account communities’ ability to cope without such access. The latter involves the construction of a measure of travel difficulty, indicating that a high proportion of residents in an area may find it difficult to travel far to access cash (or other essential services, for that matter). This measure incorporates: levels of car ownership, disability, age, income and access to public transport (in the form of nearby bus stops).

Looking at communities with poor access to cash and a high proportion of residents who may struggle to travel to access their money, provides us with a clearer idea of where poor cash infrastructures may have the highest negative impact. While this of course does not mean that there will not be individuals in other areas for whom access to cash is a problem, it does offer a useful tool for the industry to prioritise need – for example, when evaluating communities’ requests for a new ATM or identifying which ATMs to protect through additional subsidies. Indeed, as shown in the map below, there are many vulnerable areas without protected ATMs which may benefit from them:

Map of vulnerable areas & protected ATMs

Overall, we find that over a quarter (27 per cent) of neighbourhoods in our case study fall within the 20 per cent worst areas nationally for travel difficulty and have an AvCash Index score of less than 10. Similarly, 8 per cent of areas score poorly for travel difficulty and have no free ATM, while a further 12 per cent of areas have just one free ATM and high travel difficulty. These neighbourhoods are not solely rural; many are located on the outskirts of towns. Taken together, we find that over 100,000 people in this region (out of approximately 500,000) live in vulnerable neighbourhoods and do not currently benefit from a protected ATM.

Our geographical mapping approach therefore presents a potentially valuable tool to identify vulnerability by taking a community-based perspective. It raises further questions about the sustainability of the UK cash infrastructure and the ability of LINK and regulators to reign in private and profit-driven actions by providers of access to cash.

But crucially, we believe that our approach provides policy-makers and regulators with additional insights into the impact current changes have on the most vulnerable communities, and to better understand what vulnerability means in particular contexts. We are hoping to work closely with stakeholders to map access to cash nationally to inform policies towards ensuring cash is available for free to those for rely on it.

 


Read the full report here:

Report: ‘Geographies of Access to Cash: Identifying vulnerable communities in a case study of South Wales.’

Making a difference in FinTech? Evaluating the impact of Nationwide’s Open Banking for Good programme

By Sharon Collard & Jamie Evans

Nowadays, fintech startups often emerge with the ambition of ‘doing good’ and changing society for the better. This surely is to be welcomed – but what is the best way of ensuring it actually makes a positive difference to consumers? In this blog, we attempt to answer this question, outlining the first stage in our evaluation of Nationwide’s Open Banking for Good (OB4G) programme.

As its name suggests, OB4G was set-up with the ambition of being ‘for good’. Launched by Nationwide in 2018, it is a £3 million programme which aims to leverage Open Banking technology to create and scale new apps and services, all of which are designed to help the 12.7 million adults in the UK who are ‘financially squeezed’. The ambition to support this group of consumers – who tend to have high debt-to-income ratios, coupled with low savings – is clearly a positive one, but how can those designing innovation programmes turn this ambition into reality?

Moving the Dial report cover

That is the question Nationwide has asked us to explore through an independent evaluation of the OB4G programme.  We have already published a report outlining the lessons from the ideation and implementation of OB4G, and we share below three key lessons that we believe can inform the design of future ‘fintech for good’ efforts. We continue to support the successful OB4G fintechs (who we call Challengers) in measuring the financial and social impacts of their Open Banking-enabled products and services on end-users throughout, with a final report scheduled for Q2 2020.

 

Lesson #1: Problems looking for solutions, not solutions looking for problems

One of the early lessons of the programme is the importance of identifying real-world problems that might benefit from tech solutions – rather than retrospectively finding a socially useful purpose for an existing product or service.

To do this, the OB4G team at Nationwide involved charity partners from the very beginning to identify the real-life challenges facing people who are ‘financially squeezed’ that the programme could tackle. These charity partners – including Citizens Advice, Christians Against Poverty, the Money Advice Trust, the Money and Mental Health Policy Institute, and The Money Charity – have great insights into the needs of people living on a financial knife-edge, and so were well-placed to identify the issues facing consumers and help shape the programme. In the words of one challenger, this helped overcome the risk of ‘hipsters designing for hipsters’!

Lesson #2: Locking the ‘innovation cage’

Together, the charity partners and Nationwide’s OB4G team identified three pressing challenges for the OB4G programme to tackle:

  • Income Smoothing – helping the growing number of people who have irregular or unpredictable income to manage their regular outgoings
  • Income & Expenditure – making it easier for someone to produce an accurate statement of their income and expenditure
  • Money Management & Help – helping people to practice and maintain good money habits

In our qualitative interviews with OB4G Challengers, they emphasised the value of having well-defined real-life problems to solve, which kept them tightly focused on doing one thing well for a particular consumer segment. This was described by one as an ‘innovation cage’ that allows creative freedom and innovation but in a way that keeps the social purpose of OB4G front and centre.

Importantly, the startups were not alone in their ‘innovation cage’! They were partnered with a charity (or in some cases more than one charity), which could contribute its knowledge and insight about the target audience throughout the development process. This element of ‘co-creation’ was almost as valuable to the Challengers as funding.

Lesson #3: The challenge of different ways of working

Our evaluation not only sheds light on what works, but also on challenges that innovation programmes like OB4G invariably encounter. One such issue was the very different ways in which startups and established organisations work – whether charities or a large commercial organisation like Nationwide.

While ‘agile’ working is part and parcel of fintech startup culture, for charities – whose focus is often on fire-fighting and delivering their core purpose – this can be harder to achieve. The same is true for large commercial organisations, where there may be many layers of bureaucracy to navigate in order to get things done. So while the startups hugely valued the insight and support they got from OB4G, there were times when things didn’t move quite as quickly as they would have liked.

The key lesson for fintechs and innovation programme designers is that, yes, it is hugely beneficial to work with charities and people with lived experience to co-design products and services. BUT you need to build in sufficient time (and understanding) to make this happen.  Our evidence also indicates that programmes should routinely offer to fund Charity Partners for their contribution (even if Charity Partners aren’t always able to accept such funding).

What next?

So far, our evaluation has focused on the process of setting up and running the OB4G programme. We are now considering the impact that OB4G actually has on consumers. As such, we are working with the five remaining Challengers – Ducit, Openwrks, Toucan, Trezeo and Tully – to measure the effect of their products on consumers’ financial wellbeing. Our aim is to make a useful contribution to a growing body of evidence around how fintech startups can actually ‘do good’ and make a difference to the lives of their users.


Read the first stage of our evaluation here:

Report: ‘Open Banking for Good: Moving the Dial?’

 

Lessons learnt so far on spending controls for gambling transactions: an update from the MAGPIE research study

By Jamie Evans and Sharon Collard

Yesterday’s move by the Gambling Commission to ban gambling using credit cards is a welcome public health intervention and one that now shifts the focus onto other ways for people to control their gambling spend. ‘Spending controls’, offered by a growing number of banks, provide one such solution, giving customers the option to block gambling transactions from their accounts. But how can banks maximise the effectiveness of such controls? In this blog, we provide an update from our strategic partnership with GambleAware, which aims to answer this and other questions about the potential role of financial services firms in reducing gambling-related harm.

In September 2019, we officially launched ‘Money and Gambling: Practice, Insight, Evidence (MAGPIE)’ – a three-year programme between the University of Bristol’s Personal Finance Research Centre (PFRC) and GambleAware, a charity who fund research, prevention and treatment into the harms of gambling. The programme is designed to explore and improve the way that financial firms tackle gambling-related harm.

Since then, we have been busy working on the first of several projects within the programme. This considers how ‘spending controls’ – otherwise known as ‘gambling blocks’ – that are available on a growing number of debit and credit cards can be as effective as possible in reducing gambling-related harm. To do this, we have conducted expert interviews with banks and other key stakeholders; consulted people affected by gambling through Advisory Boards and interviews; and reviewed academic and other literature on this topic.

We are also working with banks that have launched spending controls to understand patterns in customer data and are running an online survey of people affected by gambling to find out more about their views and experiences of spending controls. Collectively, we hope the new data collected from these different sources will help improve the industry’s understanding of what does and doesn’t work when it comes to spending controls.

So what spending controls currently exist?

Customers of several UK financial services firms now have access to gambling blocks on their accounts (as shown in the below diagram) – and we know of at least one other firm that offers a similar service on request if you telephone them. Blocks on credit card transactions should, in theory, be unnecessary once the wider ban on gambling with credit cards is introduced in April 2020.

The diagram shows that gambling blocks differ in terms of their ‘cooling off’ period (i.e. the length of time after choosing to turn off a gambling block that someone would have to wait until they can gamble again on their account). Some currently offer no cooling-off period, which means that a customer could use the card to gamble as soon as they turn off the block. CashPlus and HSBC both have a 24 hour cooling off period; while Lloyds Banking Group (including Lloyds Bank, Halifax, Bank of Scotland and MBNA) and Monzo require customers to wait 48 hours before they can gamble again.

This cooling-off period is generally recognised, by banks and treatment providers, as a crucial component of an effective gambling block – especially for customers engaged in more high-risk gambling behaviours. As such, we are very likely to see more firms incorporating this kind of ‘friction’ into their spending controls in the near future.

More than the ‘cooling-off’ period…

While obviously important, our work recognises that an effective gambling block is about more than just its cooling-off period. Friction can come in many forms and there are some really interesting ideas on the horizon about the shape that these could take.

There are also a range of other fascinating, albeit challenging, questions that we need to answer. For example, we need to understand more about the customer’s engagement with staff if and when they try to turn off the block, or what happens if they try to gamble when the block is turned on. How are gambling blocks being communicated to customers, and how do financial services firms reach the right people? Who even are the ‘right people’?! It might be the case that a whole spectrum of products and services should be made available to customers engaging in a wide range of gambling behaviours, including those who might not be engaged in risky gambling behaviours right now but may do so in future.

And there are questions that may stretch beyond the usual remit of the financial services sector. How, for example, might unscrupulous gambling operators try to circumvent such spending controls, and – crucially – what can we do about this?

Lessons from the literature

There exists a rich body of academic literature about gambling and ways to reduce gambling-related harm.  To bring this literature to a wider audience – including financial services firms – we have published a Roadmap which sets out the rationale for our programme and summarises some of the existing evidence that is relevant to spending controls. It highlights, for example, the importance of viewing spending controls as one tool in a wider harm minimisation toolkit, as well as the importance of considering the other people affected by gambling (such as partners, families, friends) and the help and support they might require from financial services firms.

You can read this roadmap document here and sign-up for updates about the programme here.


This article was originally posted on the MAGPIE blog. Read the original article here.

Gamble Aware announce new partnership with University of Bristol to explore potential role of financial services firms in reducing gambling-related harm

The University of Bristol’s Personal Finance Research Centre (PFRC) is today pleased to announce the launch of Money and Gambling: Practice, Insight, Evidence (MAGPIE), a new three-year strategic programme, in partnership with Gamble Aware, which looks at the role that financial services organisations can play in reducing gambling-related harm.

Gambling problems can destroy lives, often leaving those affected to live with severe financial and social consequences. Indeed, around seven in ten people seeking help for gambling problems report that they are in debt, with a third of these owing £10,000 or more. Between 2007 and 2014 there were an average of 500 bankruptcies per year known to be linked to gambling – the true figure, however, may be much higher because people may not disclose that their bankruptcy is related to gambling.[1]

While many people do enjoy gambling safely, the number of people who are ‘problem gamblers’ or who suffer negative consequences as a result of their gambling is far from insignificant. It is estimated that in 2016 nearly a million adults in Britain experienced sizeable negative consequences as a result of their gambling, with around 360,000 adults classified as ‘problem gamblers’ (Gambling Commission, 2019).

Betting on the banks?

Money and gambling are clearly intricately linked, with ‘gambling more than you can afford’ one of the key indicators of a gambling problem. As such, it makes sense that organisations that help us look after our money – the world of ‘financial services’ – might also be able to take actions to help those at-risk of gambling-related harm.

Such firms are regulated by the Financial Conduct Authority (FCA), which in recent years has upped its focus on the way that companies treat customers in vulnerable situations – including those living with gambling problems. As a result, firms are paying increased attention to the way that they identify and support such customers.

Indeed, in 2016, PFRC conducted research with over 1,500 frontline debt collection staff working in a wide range of financial services firms, including high-street banks, lenders and debt collection agencies. This research focused on staff members’ experiences of working with customers in vulnerable situations, including those with mental health problems, suicidal thoughts and addictions, and highlighted some of the challenges that they face – whether in identifying ‘vulnerability’, starting a conversation about it, or providing customers with adequate support or sign-posting to other sources of support.

Following that research, we held a number of ‘problem-solving workshops’ with firms, charities and those with lived experience of different vulnerable situations to develop new tools and guidance for debt collection staff when working with such customers. Many of the solutions developed have now been adopted (or, in some cases, even adapted) by firms – highlighting the fact that there is considerable appetite among those working in financial services to do what they can to help such customers.

When the funds stop, stop?

Last year saw the introduction of spending controls or ‘gambling blocks’ by several UK banks – most notably Barclays, Monzo and Starling. Once turned on by customers, these essentially prevent spending on a bank card at gambling outlets (both online or in-person).

We know that people in recovery from problem gambling already use informal workarounds to prevent themselves from spending money on gambling, such as forfeiting their card to a third party or scratching off the card security number. The new solutions from banks, however, allow customers to do this more formally – and, possibly, more successfully.

But at present there is limited evidence about the effectiveness of such spending controls, nor about the characteristics of those who use them. We also don’t know much about the unintended consequences of these spending blockers (for example, whether it leads to customers withdrawing more money as cash and gambling with that).

As such, the first six months of our programme will focus on answering these questions and building the evidence-base around what works for recovering gamblers. We will use this evidence to produce practical guidance for financial services firms around the design of spending blockers.

Get involved in the research

In order to build the evidence-base, we’ll be working closely throughout the project with financial services firms – but, more importantly, our research will place those with lived experience of problem gambling at the centre of the project, as well as those with expertise in the treatment of recovering gamblers.

So, if you’re interested in being part of the research or if you simply want to be kept updated, you can join our money and gambling network by filling out this short form.

Notes:

GambleAware is an independent charity that champions a public health approach to preventing gambling harms. The charity is a commissioner of integrated prevention, education and treatment services on a national scale, with over £40 million of grant funding under active management. In partnership with gambling treatment providers, GambleAware has spent several years methodically building structures for commissioning a coherent system of brief intervention and treatment services, with clearly defined care pathways and established referral routes to and from the NHS – a National Gambling Treatment Service. Follow GambleAware on Twitter: @GambleAware

GambleAware also runs the website BeGambleAware.org which helps 4.2 million visitors a year and signposts to a wide range of support services. Follow BeGambleAware on Twitter: @BeGambleAware

[1] See RGSB (2015) Understanding gambling-related harm and debt. Available at: https://www.rgsb.org.uk/PDF/Understanding-gambling-related-harm-and-debt-July-2015.pdf


This article was originally posted on the MAGPIE blog. Read the original article here.

Does borrowing behaviour influence wellbeing?

by Sara Davies

Standard Life Foundation recently commissioned us to conduct a rapid evidence review to understand people’s borrowing behaviour and how it impacts their financial wellbeing. This involved a structured, critical analysis of around 150 relevant items and an assessment of their methodological strengths and weaknesses. We found:

  • Income strongly influences borrowing behaviour. Low-income households are less likely to use consumer credit than those on higher incomes, but more likely to use high-cost lenders when they do borrow, often to make ends meet.
  • Owning assets has some relation to borrowing behaviour. Homeowners have higher levels of borrowing than non-homeowners; their borrowing is linked to their level of housing assets. However, we lack evidence on the effects of savings on borrowing.
  • Psychological factors shape borrowing behaviour, but not as much as socio-demographics. There are complex interactions between different psychological factors; and one can mediate (and moderate or amplify) the effects of another. Psychological effects seem less powerful in explaining borrowing behaviour than other personal factors, such as income.
  • Macro-economic conditions play a major role in shaping people’s financial situations, their access to borrowing and the cost of borrowing. Aggregate consumer borrowing rises when macro-economic conditions are good and falls when they deteriorate. At firm level, credit card design and marketing (such as credit limit increases and zero-interest offers) encourage borrowing. Speed, convenience and easy access attract borrowers to use high-cost credit, particularly where they have few other credit choices.
  • Lower financial literacy is linked to poor borrowing behaviours and over-indebtedness. There are concerns young people, with lower financial capability overall, are particularly at risk from poor borrowing decisions. The evidence is weak regarding the impact of financial literacy programmes (which tend to focus on financial knowledge) upon financial behaviour

Read more about this research

Report | Key Findings

Older and poorer communities are left behind by the decline of cash

by Daniel Tischer, University of Bristol; Jamie Evans, University of Bristol, and Sara Davies, University of Bristol
An increasingly rare sight.
ShutterStockStudio / Shutterstock.com

A future without cash seems almost inevitable. Recent statistics paint a damning picture: while cash accounted for 62% of all payments by volume in 2006, this dropped to 40% in just a decade and is predicted to fall yet further to 21% by 2026.

Digital payments, on the other hand, are trending strongly in the opposite direction. Contactless payments in December 2018 in the UK were 28% higher than the same month in the previous year (at 691m in total), while the total number of card transactions increased by 12% over the same period.

In the long term, such a shift may well have benefits for many, given the speed and convenience that digital payments offer. But in the meantime, in the next five to ten years or so, there remain lots of people still dependent on cash – particularly those who are older or from lower income households. These people, it seems, are at risk of being forgotten if current trends continue. Ironically, those who are least likely to need cash have the best access to it.

Cash still king for many

We know there is still a sizeable proportion of the UK population that continues to depend on cash. An estimated 2.2m people report that they only use cash, while there are as many as 1.3m people who are “unbanked” (do not have a current account).

In our research, we regularly encounter people who find it difficult to access mainstream banking products, do not use digital payments because they find it easier to manage their money in cash, and/or simply lack trust in digital banking. For these people, cash very much continues to be king.

This means it’s important to understand the way in which access to cash is changing for the UK population. But much of the debate so far has focused on the overall number of ATMs or bank branches in the UK, without much understanding of the importance of geography. Where these dwindling number of ATMs are located makes a big difference.

Indeed, when this was studied in the early 2000s, we learnt that bank branch closures and fee-charging ATMs were more often found in poorer parts of the country. The issue was then seemingly remedied by measures such as the “Financial Inclusion Programme” put in place by LINK, the UK’s main ATM network. This programme incentivised ATM operators to provide cash machines in lower income neighbourhoods.

More and more people are relying on post offices for cash.
Michael J P / Shutterstock.com

In our new research, we therefore sought to reexamine the geography of cash provision, using Bristol as a case study. Through detailed mapping of the city’s cash infrastructure, we found stark differences in access to cash between different types of neighbourhood. Sites of economic activity, perhaps unsurprisingly, are well served; as were some of the most deprived, relatively central, neighbourhoods.

But we also found that areas we classify as “squeezed suburbs” – relatively deprived areas on the fringes of the city – were poorly catered for. This represents a significant challenge for some of the older and less well-off residents in these areas, who are most likely to depend on cash. We found Post Offices, which offer cash withdrawals and some banking services, are often geographically best-placed to serve these communities and could be a crucial asset moving forward, at least if used correctly.

Deprived areas worse off

There are signs that the situation is now changing again. Recent research revealed that around 1,700 ATMs nationwide changed from free to fee-charging at the start of 2019, likely the result of lower overall demand for cash and a recent drop in the interchange fees paid by banks when someone withdraws cash from another company’s ATM.

This was also noticeable in our research, as we gathered data both in October 2018 and March 2019. Importantly, we found that such changes were happening more often in deprived areas. Over two-thirds of the ATMs that became fee-charging in Bristol over this time period were within particularly deprived neighbourhoods.

This seems to be because ATM infrastructure in more deprived areas tends to be non-bank owned. Comparing a relatively affluent part of the city (Whiteladies Road in the Clifton neighbourhood) with a more deprived area (Stapleton Road in the Easton neighbourhood), we noticed that while just 29% of ATMs in Whiteladies Road are non-bank owned, this rises to 89% in Stapleton Road. Some such non-bank ATM owners have publicly stated that they will convert more free ATMs to fee-charging ATMs following the recent reduction in interchange fees.

This could have far-reaching implications for already under-served communities. So, while a future without cash may be almost inevitable, if the patterns found in Bristol are replicated nationally, it is likely that we’ll see a return to old geographies of financial exclusion, with deprived communities struggling most on the journey there.The Conversation

Daniel Tischer, Lecturer in Management, University of Bristol; Jamie Evans, Senior Research Associate, University of Bristol, and Sara Davies, Senior Research Fellow, University of Bristol

This article is republished from The Conversation under a Creative Commons license. Read the original article.


Read more about this research

Mapping the availability of cash (PDF)

Responding to citizens in debt to public services

Early intervention is key to stopping Welsh households from falling behind on their council tax or social housing rent payments, according to a new report from the Wales Centre for Public Policy. In 2018, the First Minister asked the WCPP to explore the evidence around the question ‘How might public services and their contracted partners in Wales better respond to vulnerable debtors, especially those subject to prosecution and prison?’

The report – which was co-authored by Professor Sharon Collard of PFRC, and Helen Hodges and Paul Worthington of WCPP – focuses on council tax debt and rent arrears to local authorities and social landlords as key forms of citizen debt to Welsh public services and their contracted partners.

As councils across Wales are seeking large increases in their council tax rates for the coming year, the report highlights the importance of building personalised and proactive support for vulnerable citizens, rather than a one-size-fits-all approach.

Key features of an effective support system would include:

  • Building trust with citizens right when they start being responsible for paying council tax or social rents
  • Identifying any problems and acting on them as early as possible
  • Easing the process of referring people in debt into partner services, and improved access to independent specialist help

But the report also warns that the ability for councils and housing associations to respond to future increases in demand, particularly in relation to any roll-out of Universal Credit, could be hampered because of increased workload pressures.

67,600 (5.2%) of households in Wales have problem debt according to the ONS, with a greater number of them in arrears for their council tax or social housing rents than in previous years.

Read more about this research

Responding to citizens in debt to public services – a rapid evidence review (PDF)

Voices from the frontline of debt advice – new research on supporting clients in vulnerable situations

by Sharon Collard and Jamie Evans

In this post, we explore key findings from our new research, which looks at the experiences of nearly 1,600 debt advisers when supporting people in vulnerable situations.

At the recent Talk Money conference, we launched new research, in partnership with the Money Advice Trust and the Money and Mental Health policy Institute, looking at debt advisers’ experiences of working with clients in a range of different situations that might make them ‘vulnerable’.

The research was based on a UK-wide survey of 1,573 debt advisers working in approximately 400 organisations and included new data from a survey of nearly 400 individuals with lived experience of mental health problems and debt.

The report, Vulnerability: the experience of advisers, brings together these new findings along with good practice guidance for supporting those in vulnerable situations.

So, what does the report actually tell us?

1. Vulnerability is an everyday occurrence for advisers

Firstly, it’s apparent that advisers across the sector are dealing with clients in very vulnerable situations on a regular basis.

Of the 87 clients that a typical full-time adviser deals with in a working month, they can expect 35 to disclose a mental health problem. A further seven clients tell them about an addiction of some sort, be it a gambling problem, alcohol problem or other substance addiction.

Each week, nearly two-thirds of advisers encounter at least one client with a serious physical illness or disability, over a third see someone with a learning disability and one-in-five help a client who is, or has been, in an abusive relationship.

Lastly, in the last 12 months, nearly three-quarters of advisers encountered at least one client who disclosed suicidal thoughts, and over half seriously believed that at least one client was at genuine risk of suicide.

2. Levels of vulnerability may have increased in recent years

As this is the first time that levels of vulnerability have been measured across the whole advice sector, it is hard to say precisely how things have changed over time.

However, there is certainly anecdotal evidence from the advisers we surveyed that they are seeing more people in more challenging situations than ever before – with the risk that financial vulnerability exacerbates other types of vulnerability and vice versa.

3. This may just be the tip of the iceberg

For the purpose of consistent measurement, we asked advisers in the survey to tell us about those clients who disclosed their situation, rather than all clients that they believed to be in such a situation. This means that our statistics could represent just the ‘tip of the iceberg’.

Indeed, in our survey of advice clients with mental health problems, we found that as many as 44% of people with mental health problems may not disclose their condition when dealing with a debt adviser.

This could equally apply to a range of other situations, such as domestic abuse and addictions. Clients will not tell advisers everything just because they are there to help them and understanding the reasons for under disclosure is important.

4. More support is needed to help advisers deal with these situations

The primary goal of debt advisers is, of course, to help people resolve their debt and money problems; however, in many cases these financial issues cannot be resolved without considering the underlying situation.

Our data shows that more could be done here. For example, at present, 44% of advisers have not received any training on supporting clients with addictions and 56% have not received training in relation to gambling.

Such training though is on the way via the Trust’s Wiseradviser programme which is launching addictions and suicide prevention courses in the New Year.

It is also apparent that many people in vulnerable situations find it challenging to go through the debt advice process. For example, of those we surveyed with mental health problems, 48% reported that making initial contact with the advice agency was difficult, while 56% encountered difficulty in finding the information advisers needed from them.

The guidance and practical tools in our report can help advisers consider some of these issues.

5. But changes to debt advice alone are not enough

Our research also looked at the wider issues that affect advisers’ ability to support those in vulnerable situations. This highlighted the fact that many advisers felt they are working in an environment which makes it difficult for them to provide the very best support for their clients.

It takes time, money and resources to provide the right support, and in many cases advisers felt these are severely constrained. Advisers also noted that there are often situations where clients could benefit from the support of external services, but these simply do not exist locally or are already over-stretched.

While these bigger issues require co-ordination and collaboration from the advice sector and beyond, we hope our research and guidance give frontline advisers and advice organisations some useful additional tools and resources to support their invaluable work with clients in vulnerable situations.


Vulnerability: the experience of debt advisers was funded by the Money Advice Service. The report is available to download here, where you can also find data tables and a resource pack with additional tools to help advisers support those in vulnerable situations.

Further information about Wiseradviser training is available here: www.wiseradviser.org.

This article was originally published as part of the Money Advice Trust’s Thoughts at the Trust blog series. Read the original article here.

Bringing experts together to help people in vulnerable situations