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Helping those who use credit to make ends meet

Evidence type: Review i


‘Credit Counts’ is one of five ambitious agendas for change set out in the Money and Pension Service (MaPS) UK Strategy for Financial Wellbeing 2020-2030. The goal of Credit Counts is to reduce the number of people using credit for food and bills by two million.

In 2018 MaPs commissioned a thematic review focused on the question “How can we help people who are reliant on credit to make ends meet?”, and in September 2020 MaPS commissioned two further pieces of research in this area; “Why Adults Regularly Use Credit for Food And Bills: A Review” and “Analysis of The ‘Credit Counts’ National Strategy Measure: Adult Financial Capability Survey 2018.” This review seeks to update these studies, building on their findings and filling in evidence gaps where possible.

With a global cost of living crisis ramping up at the time of writing, this report is timely.

The study

This review looks at the latest evidence (published between 2018-2021) on the financially vulnerable, with a specific focus on those using credit to make ends meet. The goal of the report is to identify how people in this position might be best supported, aiming to address the following research questions:

  • What is COVID-19’s impact on the financially vulnerable and use of credit for essentials?
  • The use of credit for essentials:
    • Who is using credit for essentials?
    • What credit types are used?
    • How is credit being used (for what essential purchases)?
    • Why is credit being used for essentials (underlying drivers)?
    • What are the impacts of being declined credit?
    • How do money conversations influence financial well-being?
    • How can people who are over-reliant on credit be supported?

Key findings

1) The impact of COVID-19 on the financially vulnerable and those using credit for essentials

  • COVID-19 has exacerbated previous trends of inequality in over-reliance on credit.
  • More people are using unlicensed money lenders or loan sharks than pre COVID-19.

2) Using credit for essentials – who, what, how and why

  • Those using credits for essentials are more likely to be those with physical or mental health problems; single parents; people from ethnic minority communities; young renters (of any tenure); younger families with dependent children; 25–54-year-olds; and women.
  • Credit for essentials is most commonly spent on groceries, but also on rising living costs (e.g. energy/water bills, food, housing, transport) and to cover income/financial shocks.

3) Being declined credit

  • Since 2017, but particularly since COVID-19, there has been an increase in the number and rates of people being declined credit.
  • Being declined credit negatively affects people in a variety of ways.
  • Many customers are dissatisfied with the decline process.

4) Money conversations and financial wellbeing

  • People in the UK are secretive around the topic of money, for example 40% of people have concealed a financial product from a loved one.
  • People have barriers to discussing their financial difficulties, ranging from anxiety, low trust in credit providers and the financial industry at large, worries about credit reporting, and stigma.

5) Helping people who are over-reliant on credit: recommendations for policy and practice

  • Vital ‘moments that matter’ are being missed which can lead to people accessing debt advice too late, and in crisis.
  • People fail to seek help for similar reasons to those noted above (for not discussing their financial difficulties), but also because of a prevalent individualist societal culture that encourages self-sufficiency and personal responsibility.

Points to consider

  • Methodological strengths/weaknesses: The review methodology used a rigorous, methodological but flexible approach based on the rapid evidence assessment approach.
    • Papers are cited from a wide variety of reputable sources such as numerous academic peer reviewed journals, so the study appears thoroughly researched.
    • Details of the two Coventry University surveys referred to throughout are given, including sample size, survey method and dates.
  • Relevance: This report is relevant to all stakeholders, academics and policymakers with an interest in the credit landscape, particularly in relation to financial wellbeing.
  • Generalisability/ transferability: The research is generalisable to the UK.

Key info

Year of publication
United Kingdom
Contact information

Centre for Business in Society