Finance & law, Cost of living hub

Helping people and small businesses tackle problem debt in challenging times

The Money Advice Trust’s Chief Executive, Steve Vaid, on how the charity supports people and small businesses in financial difficulty.

At the Money Advice Trust, our aim is simple – to make a difference to people and small business owners experiencing problem debt.

No one should face financial difficulty alone, and National Debtline and Business Debtline are here to help anyone worried about their finances.  Our advisers provide free, impartial debt advice to people and small businesses struggling with problem debt, ensuring they have the support they need to regain control of their finances.

We help people understand their options, negotiate with creditors, and create manageable repayment plans.

And as the only dedicated free debt advice service for small business owners, and the UK’s Centre of Excellence for Business Debt, our Business Debtline advisers understand the complex world of business finances and offer practical help to small business owners worried about their finances.

We also work to improve the policy landscape for people and small businesses experiencing financial difficulty through our influencing work.

And at Wiseradviser, we provide accredited training for advisers from across the free debt advice sector to ensure they can be confident that the advice they’re providing is the best it can be. Last year, we provided 20,180 training places to 2,710 advisers in 800 free-to-client agencies across the England and Wales

Through our Training and consultancy work, we delivered training to 6,000 front line staff in 70 creditor organisations to help them understand and support customers in vulnerable circumstances.

Debt problems can impact anyone, and its effects on health and wellbeing can be significant. We work with partners from across the debt advice sector and beyond, to ensure people who contact our services get the support they need. Helping people access further help is important – and the DSC Guide to Grants for Individuals in Need can be a valuable resource in identifying and understanding possible sources of support.

Client challenges

Over our 30-year history, we’ve helped millions of people tackle their debts.

Last year, we helped 127,390 people in financial difficulty, including 100,690 over the phone and via our digital advice tool, as well as 26,700 by webchat. Our advice websites received 2.38 million visits.

Like many organisations, the cost-of-living has remained very much at the forefront of our work making a difference to the people and small businesses we help.

Income being too low to cover essentials is consistently one of the most common reasons for financial difficulty cited by our clients.

Unsurprisingly, we are helping a lot of people struggling to afford the basics – council tax (32%) and energy (37%) are the most common priority debt types our National Debtline clients are struggling with.

Small business owners who contact us are often feeling the added strain of high costs on their personal and business finances – with many still dealing with the fallout of Covid-19. Coronavirus is still cited by 5% of our clients as the main reason for financial difficulty, but business failure is the by far the most common challenge with a quarter citing this as the main driver of their debts.

Ultimately, a significant proportion of the people and small businesses we help are dealing with a broken budget – where they don’t have enough coming in to cover the essentials. More than two in five National Debtline clients (43%) are in this situation, with over half of Business Debtline clients (51%) struggling to bridge that income gap.

Our impact

Seeking debt advice can feel overwhelming for many people, and we know if can take a while for our clients to get in touch for support once they experience financial difficulty.

However, last year, nine in 10 clients we helped were clear on their next steps after speaking to our advisers, 88% were more confident in managing their money and 80% saw their debts reduce or stabilise as a result of our advice.

We know the life-changing difference debt advice makes for people facing financial difficulty, but there is more that needs to change to improve outcomes for people who are struggling and ensure they have access to safe routes out of debt.

So, as we look ahead to the new Government, our aim remains the same – raising awareness of the challenges faced by people and small business owners we help, and influencing the positive change needed to help them tackle their debts and manage their money with confidence.

Find out more about our work at the Money Advice Trust, and our National Debtline and Business Debtline services.