Debt, ethnicity and local area deprivation

Debt exacerbates, and is exacerbated by, the cost-of-living crisis. Those already in debt face acute challenges when prices rise. In principle, social protection provides a safety net, but CASE research has highlighted significant gaps that opened up during the 2010s. In fact, being in debt to the government is a significant contributor to problem debt, a key challenge in Greater London, where leading debt advice agency StepChange estimates half a million residents are unable to pay their debts or household bills. Household over-indebtedness and problem debt affect many dimensions of individual wellbeing, including material living standards, physical and mental health.

Recent pilot evidence from the Money and Pensions Service suggests that receiving formal debt advice is associated with better outcomes for people with problem debt. However, organisations providing debt advice have identified that there are key evidence gaps; addressing these would help to enhance the targeting of their work and contribute to supporting London's most vulnerable populations to weather the cost-of-living crisis. Specifically, there are gaps in understanding the concentration of needs for debt advice across London, in relation to both ethnicity and local area deprivation.

This project involves a intensive collaboration between StepChange and Case during which CASE will provide the academic expertise required to enhance the evidence on which their services are based.

The outcomes and benefits of the project will be:

• New practice-oriented insights for StepChange and the wider debt advice community in London about concentrations of need for debt advice by area deprivation and ethnicity.
• The establishment of a network of debt advice agencies committed to enhancing evidence-based practice, providing a foundation for future collaboration and knowledge exchange. By supporting effective targeting of high-quality debt advice in London, the project will contribute to easing the cost-of-living crisis.

Duration: March 2024 to May 2025

Funded by ESRC, Creating Opportunities through Local Innovation Fellowships Pilot 2023 .

External partner: StepChange