How the debt sector is connecting people to support
31 January
As we start 2024 UK households are facing a challenging financial landscape. Rising household bills, increased debt vulnerability, the risk of eviction for lone-parent households, and a concerning trend of defaults on essential payments are all contributing to a loss of confidence in the economy and household finances.
Household bills such as energy, water, home insurance, car insurance and council tax have risen by an average of 6% or £326 in the past 12 months.
Many households, especially those with children, have resorted to borrowing money to cover regular expenses, with 76% of credit card users struggling to repay their monthly balances.
Worryingly, financially vulnerable people are twice as likely to end up in debt when taking out a new credit product. Unsecured debt, including personal loans and credit cards, is projected to increase by 11% or £1,400 per household in 2024, according to TUC analysis.
One in 10 households reported missing payments on loans, credit cards, or bills in the month leading up to November 2023, the highest level since April 2020.
Against this backdrop families remain concerned about rising energy prices, food costs and fuel expenses. Without enhanced support, vulnerable borrowers might turn to high-cost and risky alternatives.
In this webinar we explored how the debt and collections sector is responding to the current financial landscape and how they are closing this support gap.
Listen back to hear
- The outlook for people in debt and for debt advice
- Council’s view of people in debt and how they can offer practical support
- How the debt sector is responding
- Introducing DebtStream
- Introducing Lightning Reach
- How Policy in Practice is responding
Listen back to our speakers
There is a shift to recognising that you're trying to help people much earlier in the process as often they turn to the advice sector last or too late. So if clients in the financial services sector are contacted earlier, or they're applying for discretionary grants, that's a great place to do the income maximisation work.
Providing a benefits check allows us to offer consumers within their journey something positive, in a time that is potentially very difficult. We're able to give something back as opposed to only be talking about taking stuff. We have a lot of dealings in the financial services space and this align to that consumer duty piece.
I'm really excited about collaborating with Policy in Practice. Through our portal, there's a range of grants and schemes from local councils that people can access. It's a one stop seamless journey to fill in their information and apply for support without redoing it. With Policy in Practice, we're linking that up with the benefits journey.
