This report from the Legal Services Research Centre confirms that debt problems make it difficult for people to live a normal life. Debt brings about ill-health, relationship breakdown, loss of employment, as well as distressing impacts on parents’ relationships with their children. It is currently estimated that 3.7 million people are having serious financial problems.The LSRC calculated that the average cost per debt problem to the public can be estimated at over 1000 pounds, with more serious problems involving costs of many times this amount. These costs can be set against the cost of advice, estimated at around 25 pounds in the case of National Debtline. This clearly shows the benefit that providing debt advice can have on society as a whole.
The results of the random control trial showed that people offered advice were significantly more likely to view their situation as improved after three months and the improvement was greater than would have been the case had no advice been provided. The research also indicated that people’s levels of anxiety, general health, relationships and housing stability benefited from advice.
There was also evidence that advice improves people’s understanding of their personal finances and helps them to better target the most important debts, such as mortgage and rent arrears and court fines.
The report is available at www.lsrc.org.uk/publications.htm.