R3’s latest Personal Debt Snapshot also reveals that only 6% of the GB population has ever sought debt advice in the past.
R3 President Frances Coulson commented:
“This snapshot uncovers the huge unwillingness to take debt advice – while at the other end of the balance sheet, if you had a sum of money to invest, you wouldn’t think twice about taking advice first - and what is more, in that event, the advice would be regulated and with an obligation to give “best advice”.
“This is frustrating as we know the experience of those who seek proper advice is invariably positive. While there is some confusion about where to seek clear advice for about a quarter of the population, there seems to be a ‘head in the sand’ approach or maybe it is the stigma of bankruptcy.”
The snapshot indicates that one in four (25%) do not think it is clear where to go for good, impartial debt advice, yet 41% of those who had taken debt advice wish they had done so sooner.
This is set against a backdrop of record personal insolvencies for 2011 and a tendency for more people to think their financial situation will worsen rather than improve, with nearly a third (32%) stating their financial situation will worsen in the next six months. However, there has been a slight decrease in the number of people with no savings, now at 1 in 5 of us.
Of greater concern are a group of over 2 million GB adults who say they are currently in a Debt Management Plan, much higher than estimates from previous years.
Frances Coulson concluded:
“The point is we simply don’t know how many individuals are in a Debt Management Plan – no-one is counting them. To have some idea of the levels of debt in this country we should know. My concern is that people are clearly unwilling to take debt advice anyway, so are far more likely to be pushed into a ‘product’ by those with a vested interest.
“Over a third of those who did take debt advice were not aware of the range of options they had beforehand. I would recommend taking a deep breath before choosing a debt solution and make sure you know what all the options are.”
