More than four in five UK residents aren’t seeking out financial help or advice despite widespread debt difficulties, new research shows.
A survey of 1,500 adults in the UK commissioned by Fair4All Finance found that 82 percent of respondents do not seek financial advice even though 63 percent admitted they were struggling with debt.
When it comes to seeking financial help and support, people were more likely to turn to those they know personally – 32 percent turned to family and 25 percent to friends – compared to debt advisers or council services (25 percent) and their bank or current account provider (19 percent).
Fair4All Finance’s data also shows that people are turning to new sources of support, with 18 percent asking their energy provider for help and advice in 2023: double the 9 percent seen in 2022.
Mounting pressure means people are increasingly delaying the impact of purchases and bills, with the use of credit cards (52 percent vs. 47 percent), buy now pay later (BNPL) agreements (20 percent vs. 15 percent) and arranged overdraft facilities (21 percent vs. 19 percent) all rising year-on-year.
Lauren Peel, Director of Consumer Insights at Fair4All Finance said: “Keeping concerns to yourself is totally understandable, but the pathway to dealing with problem debt starts with a deceptively simple step: talking to someone about it.
“Our findings are a stark sign of the barriers to managing debt, despite it being a daily reality for millions of people. It’s simply not sustainable to have a situation where the overwhelming majority of people are not opening up about their financial struggles, despite the strong likelihood that family, friends and colleagues are also feeling the strain.
“Often people do not know where to turn for help, or are reluctant to ask for help, so struggle on in silence or, worse still, take cover by relying on illegal lenders.
“As the cost-of-living crisis pushes more households into debt, we need more people to know their local credit union or community finance providers can provide a helping hand, and support with debt advice to improve their financial wellbeing and resilience.”
Being rejected for a loan from mainstream lenders is a key triggering factor for people to borrow from unauthorised or unlicensed lenders.
Illegal money lending is especially concerning in a climate where the closure of regulated lenders has created a dangerous credit vacuum for lower-income borrowers, leaving them with fewer safe options.
A separate study by Fair4All Finance recently revealed over three million people in Great Britain may have borrowed from an illegal moneylender in the last three years.
