Context
The overarching purpose of the Money Advice Service, (MAS), is to assist people across the UK to manage their money well, both for daily living and planning for the future, and deal with financial difficulties. MAS identified the debt cycle as an important area for research, given the higher breakage rates in the early stages of repayment solutions, and the number of debt advice clients becoming ‘repeat’ clients. It is hoped that increasing clients financial skills and confidence and the availability of debt advice will reduce the number of people caught in the debt cycle. MAS therefore wished to explore the integration of debt advice and financial capability interventions.
The study
The study was designed to identify existing evidence about integrated advice in the UK, and to explore whether relevant programmes had been evaluated to determine their effectiveness. The study was based on in-depth interviews with five debt and financial capability experts, a review of existing evidence on the effectiveness of integrated advice, and a call for evidence, completed online by debt advice and financial capability support providers.
MAS commissioned IFF Research to undertake the call for evidence. MAS launched the call for evidence in August 2018, to around 1,000 provider email contacts. The call for evidence was open for nearly two months, from 23rd August – 14th October 2018.
Key findings
The current integrated advice offer
- The review identified 24 programmes that included integrated financial capability support and regulated debt advice. A further seven initiatives provided limited debt guidance alongside financial capability support.
- The review found that most of these programmes offer financial capability support before debt advice, after debt advice, or in parallel with debt advice.
- Face-to-face contact with an adviser featured in all the interventions. Some initiatives also included group activities.
- Most interventions offered debt and financial capability advice at the same location.
- Financial capability training included the following topics: budgeting, managing money, and savings advice. Benefits entitlements, tax payments, and banking were also frequently covered.
- Advice on pensions, insurance and other financial products was only included in a small number of relevant initiatives.
- A minority of interventions targeted specific groups, including students, young parents, people with mental health conditions and social housing tenants.
The effectiveness of integrated interventions
- Evaluations of integrated programmes were identified through desk research and the call for evidence. The robustness and quality of these studies was assessed. A 1-5 assessment scale was used, where 1 was the most robust (i.e. included a control group) and 5 was the least robust.
- The review found little robust evidence on the impact of integrated debt advice and financial capability support. Most evidence received a score of 4, largely owning to relatively small base sizes limiting the robustness of quantitative evidence. The majority of the evidence was also limited to evaluating short-term outcomes. Furthermore, evaluations often focussed on service user satisfaction and their views about money, rather than measuring debt recurrence or the development of financial ability.
Delivering integrated debt advice and financial capability support
- Expert stakeholders commented that the best time for providing integrated advice varied according to circumstances. Financial capability support may therefore be helpful before, during or after debt advice, and should be tailored to individual’s needs and ability to cope.
- Enablers supporting the delivery of effective integrated advice, were identified as follows:
- A single advisor providing a holistic approach, tailored to the individual’s circumstances.
- Ensuring advisors understand the multitude of factors that can lead to debt and financial concerns.
- Clear communication channels and data sharing protocols between organisations.
- Promoting accessibility, including efficient referral procedures and using accessible venues.
- Providers identified several barriers to providing integrated advice, as follows:
- Resourcing can be problematic, as it is often assumed that a single organisation will provide both financial capability support and debt advice.
- Adding financial capability support to a debt solution would require additional time with each client, potentially reducing the number of clients seen. This could lead to fewer debts being written off.
- Difficulties around maintaining client contact, some of whom experience chaotic life styles, mental health issues and are geographically isolated.
Recommendations:
Future research focused on understanding whether integrated advice creates more positive outcomes than debt advice alone would be useful. This should include large quantitative samples and longitudinal research, tracking client outcomes over time.
Points to consider
-
Methodological limitations: Evaluation evidence was only available for 10 of the 24 integrated interventions featured in the review. The quality and robustness of this evidence is limited. The findings should therefore be viewed as indicative, suggesting possible areas for further research to determine the impact of integrated advice.
-
Generalisability/ transferability: Only a minority of the evaluations included a control group, large quantitative sample, or longitudinal research with service users. These factors reduce the robustness of the research and the potential for transferring findings to other contexts.
