Published on:
29 February 2024
Every year, MaPS conducts its Debt Need Survey. Here, Debt Insight Manager Paul Das discusses the results of our 2023 survey and what it can tell us about who needs advice now and who might need it in the future.
The Debt Needs Survey provides us with insights into the need for debt advice across a nationally representative cross section of the UK population, including ethnic minority, socially deprived and rural communities.
When carrying out the survey, we strike a balance between maintaining comparability between each year’s survey and reacting to what has been a very changeable world. For example, the rising cost of living and higher mortgage rates were topics we needed to address.
The measure we use identifies the people who need debt advice and those who are at risk of needing it if their situation does not improve. Respondents are broken down into:
See an explainer about the need for debt advice measureOpens in a new window
The survey is conducted online, and like all organisations conducting online research, we continually review and strengthen our data quality control procedures from year to year. These steps identify the small minority of interviews that don't seem to represent considered and realistic responses to the questions we ask.
In 2023, 15% of the UK adult population fell into this category, equivalent to 8.1 million people. Most people in the UK, 61% of the population – or 32.5 million people – don’t need debt advice.
Our assessment is that there has not been a substantive change to the amount of people who need debt advice when compared to 2022.
See a graph illustrating how many people need debt adviceOpens in a new window
The profile of the people who do need debt advice also hasn’t changed a great deal. They are typically:
These figures leave 24%, or 12.6 million people, in our ‘at-risk’ category. These people are struggling to keep up with bills and credit commitments, or they are running short of money for essentials and using high-cost credit instead. Creditors have not started action against them yet.
This year, we have gone into more depth when looking at the 'at risk' group. As interest rates and the cost of living continue to be a challenge to households, we looked at their situation and compared them to both people who need debt advice and to the UK population.
People at risk of needing debt advice are more similar to the UK population as a whole in terms of income, tenure, and ethnicity. However, they are generally younger:
Age
Under 35
35–65
66+
UK population
27%
49%
24%
At risk
38%
51%
11%
Need debt advice
55%
43%
2%
Gross household income per annum
Under £30,000
£30–50,000
Over £50,000
Prefer not to say
UK population
49%
21%
18%
12%
At risk
55%
19%
14%
12%
Need debt advice
73%
8%
7%
12%
Tenure
Own home outright
Own home with mortgage
Rent from social landlord
Rent from private landlord
Other arrangement
UK population
29%
34%
17%
17%
3%
At risk
16%
35%
21%
23%
5%
Need debt advice
8%
28%
34%
27%
3%
Ethnicity
Any minority group
UK population
14%
At risk
20%
Need debt advice
31%
See a graph illustrating this profile of people needing debt adviceOpens in a new window
UK population percentages in the tables, graphics and text of this blog are based on the results from everyone interviewed in the Debt Need Survey. Detailed demographic quotas and weighting were used that accurately represent the UK population
While the at-risk group are more varied demographically compared to people who need debt advice, there are similarities between the two groups. The at-risk group’s circumstances have impacted on their finances, but not as severely as those who need debt advice.
Let’s start with employment: both the at-risk and need debt advice groups are mainly in paid employment, as most of them are still of working age. However, they are more likely to be working on fixed term or zero hours contracts, or doing gig economy or casual work than the UK population as a whole:
Type of employment
Permanent employment
Self-employed or freelance
Fixed term or zero hours contract, gig economy, casual or seasonal work
UK population
78%
9%
13%
At risk
76%
8%
15%
Need debt advice
64%
9%
27%
However, the at-risk group are also not as secure as the UK population as a whole, so it’s important that they are financially resilient. Unfortunately, that isn’t always the case.
In the survey, we asked people how they would cope in certain situations that might occur and how often they don’t have money when they need it:
The results for the three groups are as follows:
Financial resilience
Could not pay an unexpected bill over £100
Could not cover living expenses for more than a month
Timing of bills and income don’t match at least some of the time
UK population
22%
28%
36%
At risk
36%
43%
57%
Need debt advice
46%
61%
84%
The at-risk group are just about managing, but life events could easily tip them over into financial difficulty. This has already happened to some people:
Life events experienced in the past 3 years
Significant health problems
Large unplanned expense
Big drop in earnings
UK population
19%
13%
10%
At risk
21%
19%
13%
Need debt advice
29%
29%
20%
Using the guidance that MaPS provides on our MoneyHelper website to prioritise bills, maximise income and build savings could definitely help people in the at-risk group, but some are starting from a position of low financial resilience.
We wanted to understand how recent mortgage rate rises had impacted people, coming after several years of low and stable interest rates and the availability of fixed rate deals. We also wanted to know how this might change in the future as their fixed rate deals come to an end.
We learned that 35% of the at-risk group have a mortgage, which means they will have some exposure to changes in interest rates now or in the future. Most (20%) are on a fixed rate mortgage with an interest rate of 1–4% and only a few (2%) had a fixed rate term ending in 2023.
There are a few causes for concern, however, with 7% on variable rate mortgages exposed to changes in rates, and 4% who are tied into fixed rates of 5% or more. Finally, 23% are renting from a private landlord and may also be impacted if their landlord owns the rental property with a mortgage and needs to charge a higher rent to cover their own payment increases.
We know that people with mortgages and higher incomes have started to ask for debt advice, which hasn’t happened in the past. However, based on these findings it seems unlikely that this will increase significantly for now.
One step that borrowers could take when starting to get into difficulty is asking for help from their mortgage provider. At the time of publication of this blog, the biggest lenders are currently offering a short-term switch to interest free payments, extended loan terms and other measures.
Mortgage holders have varying levels of confidence about the future and their ability to keep up with payments, either on a new fixed rate deal that they started in 2023 or if their rate changes in the next 12 months.
We asked people to rate their confidence on a scale, with 10 meaning they were very confident and 0 not at all confident.
Only half (50%) gave themselves a score of between eight and ten, and this was lower for the at-risk group (36%) and those who need advice (28%).
Learnings from the 2023 survey will allow us to:
We will continue to monitor the need for debt advice in the UK, using the insights we gain to inform our policy decisions and support the agencies we fund to deliver debt advice.
Our consultation on debt advice commissioning, launched prior to publishing this blog, uses the data from the 2022 Debt Need Survey as evidence. As mentioned above, the profile of people needing debt advice has not changed a great deal between 2022 and 2023.