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A Helping Hand
New research finds debt advice has significant positive impact
A new study into the impact of debt advice has found:
- The average cost to the public, and in lost economic output is estimated at over £1000 per debt problem
- Debt advice can contribute to lowering debt and have a significant positive impact on stress, general health and relationships
The Legal Services Research Centre (LSRC) and DCA Research Unit have published a new research report on the impact of debt advice. The research consisted of four studies: quantitative interviews with 176 clients from 14 advice agencies; analysis of data collected as part of the 2004 Civil and Social Justice Survey (CSJS) conducted by the LSRC; qualitative interviews with 42 people from the CSJS survey who had experienced debt problems; a random control trial of people in debt which attempted to compare the different outcomes for those receiving and not receiving advice
The impact of debt
- Debt problems were found to have contributed to health difficulties, relationship breakdown, job loss, difficulty finding a new job, loss of housing and deterioration in relationships with children
- In the advice agency study, eighty-nine per cent of clients reported worrying about their money problems "most" or "all" of the time
- In the same study forty-eight per cent of clients described the impact of problems on their health as "great" and 43 per cent felt that their health had suffered "to some extent"
The impact of advice
- In all four studies people tended to see their situation as improved following the provision of advice
- The control trial provided some evidence that people who are offered advice become more focused on dealing with priority debts
- In the advice agency study, at both six and twelve months after receiving advice, clients reported decreases in the total amount of debt owing
- In the advice agency study the number of those worrying "all" or "most" of the time about their money problems reduced from 89 per cent at initial advice, to 59 per cent at six months and 31 per cent at twelve months
- In the advice agency study, at both six and twelve month follow-up, about two thirds of clients stated that their health had improved a little or a lot since the initial interview. Most of those experiencing improvements linked these to the advice they had received for their debt problems
The report concludes "a debt advice strategy that employs a range of service delivery methods to reach and effectively support those who face debt problems, including multiple delivery channels, outreach services and check-up initiatives, is likely to result in more people tackling debt successfully."
As well as the findings on the impact of debt and debt advice, there is useful commentary on the successes and failures of the methodologies. This will be of interest to agencies that are trying to develop tools to measure their own impact.
Read the report
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