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The Referral Gap

Evidence type: Insight i


With recent regulator changes (particularly in pensions and with the introduction of Universal Credit), the responsibility for money management has increasingly fallen on the individual. People are finding themselves having to make major decisions, such as when to draw down on their pensions, or the best savings and investments products to choose. This is combined with a growing number of people having unpredictable incomes, due to the increase in non-standardised and less secure working patterns.

Financial capability is clearly more important than ever, with expert advice having an important impact on people’s financial outcomes. Ensuring people are referred to suitable financial advice at the right time is essential if people are to manage their finances successfully. However, this doesn’t always happen, with Citizens Advice estimating that about 3.4 million people who have raised issues with a trusted source don’t receive advice or a referral and fall into the ‘referral gap’.

The study:

This 2016 report from Citizens Advice complements the ‘Advice Gap’ report that is also published on the Evidence Hub, which identifies major gaps in advice provision. This current report examines the impacts of the referral gap, and looks at how ‘warm’ referrals between trusted sources of free and paid-for financial advice can help to close this void.

The findings presented in this report are based on three main sources:

  • A review of existing literature and consultations with Citizens Advice money and debt advisers, independent financial advisers (IFAs) who do pro-bono work for Citizens Advice, and a workshop with senior staff from local Citizens Advice offices.
  • Findings from an online YouGov survey of 2,041 adults, with the data collected in October 2015. The survey has been weighted to be representative of the adult population of Great Britain.
  • The Citizens Advice Network Panel, which is a monthly survey sent to staff and volunteers across England and Wales, asking questions about their experiences and opinions on policy issues.

Key findings:

  • Citizens Advice found that people frequently raise their money issues for the first time with professionals such as doctors, banks or the local council.
  • When these professionals are not able to help directly, clients need to be referred on to appropriate advice. However, this does not always happen, with advisers describing a ‘polarised’ advice market, with underdeveloped systems in place for referrals.
  • In the last two years (at the time of publication) 3.3 million people had needed free financial advice but failed to get it because they didn’t know it existed or how to access it.
  • In the past two years 8.5 million people have not paid for advice but would have been more likely to do so if they knew how to pick the right advisor.
  • Results from the Citizen Advice Network Panel show that five-in-six (83%) Citizens Advice advisers felt confident making referrals to free financial advice. However, only 29% felt the same about making referrals to paid-for advice.
  • Referrals seem to work, with almost half (48%) of the people who received free money advice in the two years preceding this report did so following a referral.
  • Strong referral networks can actively help people find the right advice so it is important to make a distinction between a ‘signpost’ and a ‘ referral’. While signposting simply provides the client with details about other organisations, referrals are based on direct interactions and a handover of client relationships between two (or more) organisations.
  • Free guidance and paid-for advice should work together in the best interests of the client. Good referral systems are crucial to this, and should be built on these four key foundations:
    1. Cross-sector partnerships and strong relationships between different types of providers.
    2. Shared knowledge of the needs and capabilities of different providers.
    3. Secure digital referral systems to increase efficiency.
    4. Mutually agreed policies for handling referrals.
  • Successful referral networks should increase the number of people who access appropriate advice and significantly improve their financial outcomes.

Points to consider:

Methodological strengths and limitations:

  • Some findings are scaled-up to be representative of Great Britain based on results taken from the 2011 census; meaning they are extrapolated using population figures that are almost a decade ago.


  • While four years old, this report is still relevant to any stakeholders with an interest in financial advice, and in particular to those wishing to design interventions that offer early solutions to prevent people falling through the referral gap.

Generalisability/ transferability:

  • The results of this research are useful for informing people about the referral gap and how this gap can be filled, but readers must be aware of any changes in the advice sector since the date of publication (2016).

Key info

Year of publication
England, Scotland, Wales.
Contact information

Citizens Advice