Context

Around six-in-ten working age adults in the UK are financially struggling or ‘squeezed’. Keeping on top of daily finances can be a constant struggle, especially when combined with the increasing complexity of financial decision-making. This is often compounded by sudden income shocks, unexpected expenses and unplanned life events (bereavement, unemployment, etc). Research has shown that over three million working age adults are finding it hard to keep up with their financial commitments, yet have not accessed any help or advice. Clearly, these are the people most in need of some form of financial help, advice or guidance. However, it’s not always as straightforward as simply asking for help – there are myriad factors that often prevent people from doing so.

The study

This 2017 report from the Money Advice Service (MAS; now the Money and Pensions Service), seeks to understand what people think about getting help with their finances. The study focused on working age adults living in the UK, highlighting two consumer segments identified by MAS in previous research - the financially struggling and squeezed. In total, 3,545 online surveys were completed between February and April 2017. The research was conducted by BDRC Continental.

The two segments were composed as follows:

1. Struggling – The most vulnerable group, characterised by low-income levels, high incidence of social housing, high over indebtedness with little or no savings buffer. This group represents 24% of the UK adult working age population (9.2 million). There were 1,250 survey responses from this group.
2. Squeezed – Working age individuals on modest salaries, renting or buying with a mortgage. They have family and work pressures, and are reliant on credit usage, with insufficient savings buffers to cope with unexpected events. This group is representative of one-third of the UK working age population (12.6 million people). There were 1,502 survey responses from this group.

A third segment – cushioned – was also sampled, but results are not reported here.

Key findings

• Participants were asked about the different life events they had experienced in the past 12 months, and those they expected to occur in the next 12 months.
  • Almost half (44%) stated that they had thought about general money management (e.g. saving, budgeting etc).
  • Regarding one-off events, 20% had made a major purchase (new car, significant home improvements, etc).
  • One-in-five (19%) saw a change in the benefits they received, with a similar percentage having debts that were causing problems (18%).
  • One-in-seven (14%) had to deal with a negative family event (divorce, illness, bereavement).

• Three-in-five (59%) did not seek help with the life event they had experienced. Reasons for this included:
• Low perceived importance of the life event – 12% of people did not think there was a big decision to be made.
  • Confidence – 37% of people were confident they could handle it themselves without any help.
  • Lack of awareness/trust/self-confidence – 10% of people thought that they needed support, but didn’t go on to seek any.

• People who need to make financial decisions that typically require a significant amount of planning, such as buying a house or accessing retirement funds, are more likely to say they need help.
• For less complex events (general money management or buying a car) fewer people seek help before going ahead.
• Three-in-five people (59%) recognised the need for help when buying their first house, with 81% of these people actually going ahead to seek and receive help.
• Over a third (36%) of people with children who experienced a negative family event identified a need for help and sought it, compared to just 21% of those without children who experienced this event.

MAS identified four lessons from this report to build upon in the future:

1. The biggest opportunity to get more help to more people is through general awareness raising and trust building, whether this be through targeted campaigns or more active outreach to vulnerable people.
2. There is a real opportunity to help both parents and children together by designing services around whole families, with opportunities to frame this in the context of key life events.
3. Quality and relevance of advice must be improved; ensuring it is tailored and relevant to the individual(s) involved and takes account of other events that are affecting their lives.
4. Confidence – The largest single reason for not seeking help is because people think they don't need it. Research into how to increase people’s confidence when it comes to seeking financial help must be prioritised.

Points to consider

• This report is based on a large sample, though few details are given in the report regarding sampling, weighting and statistical testing.

• This report is relevant to all stakeholders and policymakers who are immersed in the advice sector. It is of particular relevance to those looking to increase access to, and take-up of, financial help and advice.

• This report uses a large sample, and the reader can have a fair degree of confidence that the findings reported here are representative of the working age adult population in the UK.