Evidence type: Insight i
Qualitative research is more exploratory, and uses a range of methods like interviews, focus groups and observation to gain a deeper understanding about specific issues - such as people’s experiences, behaviours and attitudes.
Quantitative research uses statistical or numerical analysis of survey data to answer questions about how much, how many, how often or to what extent particular characteristics are seen in a population. It is often used to look at changes over time and can identify relationships between characteristics like people’s attitudes and behaviours.
Previous research has suggested that fewer than one per cent of the UK adult population uses a pawnbroker, rising to around two per cent among people on low incomes. The basic premise of pawnbroking is that a customer takes an item to a pawnbroker, where they agree the amount of money that will be lent and secured against the value of that item. A loan agreement is taken out that details the loan period and the amount of interest that will be charged. The agreement is secured against the item that is pledged and if the item pawned is not redeemed the item may be sold. While the customer will not be chased for any debt in excess of the proceeds when the item is sold, if there is any surplus on the sale (after costs) this can be collected by the customer. As the loan is made against the value of the pawned item and since the debt would not be chased whatever the outcome, there is no need for a credit check.
Since a similar survey that was conducted by PFRC in 2010 (Collard and Hayes), the regulatory environment and the role of pawnbrokers has changed significantly. While a review of the pawnbroking industry in 2018 by the Financial Conduct Authority (FCA) identified numerous strengths in the sector, it also raised concern about how fairly customers were treated when they did not redeem their pledge.
This 2020 report from the University of Bristol’s Personal Finance Research Centre presents the findings from an online survey of 1,669 pawnbroking customers conducted in February and March 2020 (before the full impact of the Covid-19 pandemic). The report also analyses loan-level information of 85,000 loans from some of the UK’s major pawnbroking companies, using data up to the end of 2019. Cross-tabular descriptive analysis is presented in the report, alongside findings from regression analysis which can determine the importance of multiple characteristics simultaneously.