How the pandemic affected outcomes from debt advice
The Covid pandemic has had a very distinct impact on the progress of people seeking debt advice, according to StepChange Debt Charity. Their initial progress is slower than before the pandemic, but by nine months after advice, progress appears more positive than before Covid.
StepChange measures the impact of debt advice on clients – primarily on progress on resolving debt, but also wider measures such as wellbeing – through surveys undertaken at three months, nine months and fifteen months after advice.
The third update on client outcomes, published today, finds that:
- Three months after advice, before the pandemic 75% of clients reported making progress towards resolving their debts. During the pandemic, this proportion fell to 67%.
- The two fifths of clients directly impacted by Covid-19 were more likely to have negative budgets at advice, and also reported lower levels of progress three months after advice.
- Nine months after advice, before the pandemic 65% of clients reported being able to make ends meet either every month or most months. During the pandemic, this increased to 78%.
The overall profile of clients before and during the pandemic was similar, although during the pandemic a higher proportion had an additional vulnerability, alongside their financial problems.
One particular worry, in light of the rapidly escalating cost of living pressures now emerging for UK households, is the increase in the proportion of households who were behind on household bills at three months after advice. Before the pandemic this was 28%, rising to 32% during the pandemic. Among those directly affected by Covid the proportion was 43%. Looking ahead, this gives cause for concern, especially given the prospect of continuing rises in energy costs.
The full report gives more detail on a wealth of measures, including the notably lower levels of wellbeing reported by debt advice clients during the pandemic.
Commenting on the findings, Richard Lane, Director of External Affairs at StepChange, said: “Resolving debt problems is more often a marathon than a sprint, and this seems to have been particularly true during the pandemic. Initial progress was slower than before Covid, but by nine months after advice had generally exceeded pre-pandemic progress.
“We see measuring the outcomes of debt advice as a crucial way of checking that our service works, and identifying where we can most usefully target improvement. On this occasion, it has also helped us to see and understand the impact on progress that Covid created. We are the only debt advice organisation to publish such research, but it seems likely that this “Covid effect” would also have been felt across the wider debt advice landscape.”