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PayPlan has been providing free debt advice for over 25 years. Over that time, we have seen many changes in the people we help, and how we help them.
As well as advising people over the phone, we’re also adaptable in our digital approach. Digital communication like email, WhatsApp and, more recently, screen share facilitates have made the debt advice process more practical and less daunting.
The reasons that people find themselves in debt are also subtly changing over time. We’ve seen a shift from an over reliance on cheap credit, to people simply relying on credit to make ends meet – no matter what the cost. Especially with people who have been referred by a housing association, we are seeing an increase in the number of guarantor loans as a means of credit.
What hasn’t changed though is that people in debt experience huge levels of stress. They often don’t know where to turn for help and, as a result, often find it difficult to see a way out.
Budgeting underpins everything – whether someone comes directly to PayPlan, or they have been referred by one of our partners. If we can help them to prioritise their spending, so that their most important outgoings are covered, they can instantly feel as though a weight has been lifted.
Advising someone can be straight forward, if it is done early in the debt cycle…
Income maximisation and benefits advice are also integral – particularly for people who come to us from Orbit. Our special advice team makes it their mission to know every emergency and hardship fund, to spot benefits that people could be claiming and to pick up on vulnerabilities.
After that piece of work, it is a question of evaluating what the individual has left to repay towards their debts, and picking the best solution to do so. But this isn’t a particularly easy climate for anyone.
We’re helping people who are trying to make regular payments with different frequencies of income. For example, we’re often helping single, working parents who may receive some income from a monthly Universal Credit payment. Then, another weekly amount from child benefits and a third amount from part-time work. Add this to the fact that income from work often fluctuates considerably if it is a zero hours contract.
The longer a person’s debt problem is left to grow, the harder it is to give advice. The stress of admitting they can’t pay leads to irrational choices. People will prioritise credit card payments over food, payday loans over heating and clothing. If they don’t tell their creditors that they are struggling, litigation begins and the stress increases. Mental health suffers as a result.
The most difficult part is keeping engaged in the advice process
Relationships with organisations who put people first are integral. This way we can reach out to those who need help and put them back in control. In partnership with Orbit, we have successfully helped over 1,000 people to prioritise their debts and protect their homes.
We have worked closely with Orbit to design a service that complements their own processes; offering a range of channels to allow tenants to be referred or to self-refer. We completed a day’s on-site training with Orbit’s income and customer service teams so they have a good understanding of how we can support their customers.
Now, Orbit clearly sets the customer’s expectation before referring them. This ensures a smooth journey and maximises engagement. We also provide regular progress reports. With the individual’s consent, we can show whether we have been able to engage with them and their advice outcome.
On average, a third of people wait around four years before they seek debt advice. They will have been signposted to debt advice a myriad of times, but if this isn’t done right it just adds to the ‘noise’.
Meaningful partnerships are vital to break the cycle of debt
Once they do engage with debt advice, it is very easy to put them off and to add to their stress by over-complicating the journey. This can also be done by organisation’s using jargon or by not understanding their needs. Orbit has demonstrated through their Better Days programme that they truly care for their customers and can play a fundamental role in improving their lives.
Orbit’s research really does the talking on the evidence for this partnership approach. But, we know that 86% of people referred by Orbit are pleased because we help them feel more in control of their money. We pride ourselves on evidencing long-term change in behaviour. This is done by monitoring how many people continue with their debt plan and go on to become debt free.
I look forward to discussing the details of this in our upcoming webinar on Friday 12th June.
This article was checked and deemed to be correct as at the above publication date, but please be aware that some things may have changed between then and now. So please don't rely on any of this information as a statement of fact, especially if the article was published some time ago.