PayPlan’s research and awareness campaigns
We’re committed to raising awareness on issues that are affecting our clients. To support this, we regularly conduct client surveys to show the impact that everyday issues have on individual’s lives.
In this section, you will find results of our recent research into:
Buy Now Pay Later
Buy Now Pay Later (BNPL) is a payment option offered by retailers to allow customers to spread the cost or delay the payment of their purchase. It has become a very popular payment method for online purchases, but there has been plenty of controversy in the media surrounding these payment schemes.
We have been campaigning for greater transparency, to help inform consumers about the potential dangers that BNPL schemes such as Klarna and Clearpay pose to their credit score and bank balance. We feel the BNPL companies focus more on the scheme’s benefits rather than the consequences of not paying back your credit in full and on time.
As featured in the The Telegraph and Financial Times, our 2019 survey of over 1,000 18-34 year olds found that more than 70% of people had used a BNPL scheme to make a purchase. 73% of this group said their BNPL purchase(s) contributed towards a debt problem down the line. Although these schemes can be convenient in the short-term, they have the potential to build bad borrowing habits from an early age.
As featured in The Independent, our credit card spending at Christmas research looked at how people cope with the expense of Christmas.
Our findings showed that 55% of parents will rely on credit cards to cover essential living costs. This is a shift from recent years where we have seen families relying on credit cards for their Christmas presents.
From this 1,000-strong survey, we also found that half of parents admitted to feeling stressed about their financial situation, and 23% said they had borrowed from friends and family to keep up with payments.
We want to spread the word and warn people about the early signs of debt. In October 2019, we launched a new debt tool to help people to see how well they are managing their finances.
Diagnose your Spending is an easy to use calculator designed to ask a series of simple yes and no questions about lifestyle and spending. Once the questions have been completed, our tool will diagnose how debt-savvy users are. It is an eye-opening tool that we urge everyone to use.
Diagnose your Spending aims to highlight any money issues before they become a problem. If our tool highlights that someone is struggling, we will offer tips and advice to help regain control of the debts. Many people struggle alone with their debts. In a recent survey we conducted, 91% of people say they feel stressed about their finances.
Being a single parent can be both rewarding and difficult. In a world where all the family deals seem to be marketed at households with two adults and two children, single parenthood can be that bit harder.
In July 2019, we conducted a study to find out just how much extra it costs for a single parent to do family activities. Our findings show that:
- One in four families in the UK is a single parent family
- Nine in ten single parent families are headed by a single mother
- A third of children with a working single parent live in poverty
- One in ten single parents have used payday lenders or food banks to get by
It seems as though companies are favouring and offering discounts that single parents aren’t eligible for. As single parents are much more likely to get into debt, opening these types of deals to families of different sizes could improve the quality of life for millions of people.
Money and mental health
It has been widely reported that being in debt can have a negative impact on mental health. In our March client survey, 85% of PayPlan clients said that being in debt has negatively impacted their mental health; reported feelings of stress (91%), anxiety (84%) and depression (68%).
What is encouraging, though, is our survey also showed the positive effects that seeking advice has on wellbeing – and it is this message that we have been campaigning to share over the past year.
After seeking advice from PayPlan, our clients said:
- Over two thirds found PayPlan’s online journey to be beneficial for their mental health, as they were able to complete and digest important financial information in their own time
- 69% can now open-up to friends and family about their situation
- A huge 95% said they now feel confident in managing their money
- 93% saw an improvement in their mental wellbeing and their stress levels reduced
No longer receiving a working wage, combined with factors such as the rising cost of living, debt levels and often meagre pensions, is pushing thousands of people into financial hardship and preventing them from enjoying the retirement they expected.
Thousands of clients aged over 55 were asked various questions about their financial health, debt levels and retirement prospects.
Of a total of 3,251 participants:
- Only 10% said that they planned to retire on time
- One in three said that they’ve had to cut down on heating in order to pay off their debts
- Of those who’ve already retired, 68% didn’t feel comfortable in their retirement due to their finances
Before individuals had entered a debt plan:
- 45% of had cut down on food spending
- 47% cut down on mobility/ travel spending
- 77% cut down on their social activities
- 73% stopped spending as much on their hobbies or leisure activities
Our research on over 55s and retirement was published in the Daily Mirror and The Express.
With food bank use still rife across the UK and a considerable amount of in-work families still struggling to make ends meet, the controversy over Universal Credit rages on. In order to make sense of how well Universal Credit is (or isn’t) working, we decided to go to PayPlan clients for an informed opinion on the matter.
We found that:
- 86% of PayPlan clients who are on Universal Credit say that the wait for their first payment put them at risk of hardship
- Of those who aren’t claiming it yet, 55% of PayPlan clients who are eligible for Universal Credit felt they’d be worse off claiming it 58% of those claiming Universal Credit say that it doesn’t cover their basic living costs
- 72% of PayPlan clients on Universal Credit say they had to borrow money due to Universal Credit