insight
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.
In recent years there has been a heightened awareness of unsecured household debt (‘consumer credit’) such as credit card debt, unsecured loans and hire purchase agreements. Of particular concern is the total volume of outstanding consumer credit. According to Bank of England measures, total consumer credit in real terms increased from less than £170 billion in 2013 to more than £200 billion in 2017. Keeping up with repayments on consumer credit can place major financial and psychological burdens on households, and can affect their ability to purchase other essential items and pay for fundamental goods and services.
However, sometimes debt can be more positive. Credit cards and loans can be used to meet unexpected expenses and deal with income shocks, while hire purchase and leasing agreements may enable households to access goods such as cars earlier than they would otherwise be able to. These decisions can be logical, and in some circumstances beneficial to households whose income in the future will allow them to meet their repayment commitments without encountering financial distress. It is therefore important to distinguish between the times when incurring debt is a problem and when it is not.
This 2018 report from the Institute for Fiscal Studies, supported by the Joseph Rowntree Foundation and the Economic and Social Research Council, uses data from the Office for National Statistic’s Wealth and Assets Survey (WAS) to build on previous research into problem debt. The WAS is a longitudinal survey that interviews a representative sample of British households on a rolling biennial basis. The analysis uses a range of statistical techniques, including an array of descriptive statistics and regression analysis as well as testing findings for statistical significance. The report investigates the following areas:
Context on unsecured household debt in Great Britain
Debt servicing pressure
The dynamics of servicing pressure
The medium term
Andrew Hood, Robert Joyce, David Sturrock
The Institute for Fiscal Studies