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Helping those in debt to help themselves

Helping those in debt to help themselves

Leeds University Business School is working with Citizens Advice Leeds and Citizens Advice Bradford and Airedale to develop ways to help people with financial problems more effectively.

People visiting CABs and other agencies to discuss debt problems often experience psychological distress that may make the traditional advice process less effective.

The project will research methods that can be used as part of the advice-giving process that not only help clients to reduce their debts and manage their finances, but also help them in making financial decisions.

The Leeds University Business School team will work with CABs in Leeds and Bradford to develop a “psychological toolkit” that can be incorporated into the advice process to help clients cope with the stress of the situation.

The toolkit will be designed so that it can be rolled-out in CABs and other advice agencies across the UK to bolster the financial advice they provide. 

The three-year project is funded by the Leverhulme Trust. 

Dr Simon McNair of the Centre for Decision Research (CDR) at Leeds University Business School said: “Total personal debt in the UK was £1.43 trillion in November 2014 - roughly £29,969 per UK-citizen - and is projected to reach £2.25 trillion by 2019.

“The CAB assisted with 386,009 new debt-related issues between April and June 2014 alone. With such high demand stretching advisor resources, the onus must be placed primarily on assisting clients with the financial aspects of their cases.

"This project aims to develop a means by which clients might also be guided to develop resiliency to the more emotional, stress-related psychological barriers they might face. This could stand to further improve the effectiveness of the practical financial advice and guidance that is offered by CAB advisors.

“Feelings of stress or unhappiness often interfere with how people confront and deal with their financial issues.

"Many people find it difficult to deal with their debts due to how emotionally stressful it might be to address their problems directly.

"This research will look at ways to tackle this problem by improving not just money management skills but also reducing the associated psychological distress.”

The research will involve working with CAB clients with debt problems and their advisors to assess the most common types of problems that clients face and will conclude with an eight month study of 200 bureau clients. 

Clients who do, and do not, receive the specially-designed psychological toolkit alongside financial advice will be compared in terms of how effective the debt advice process has been at helping to resolve their financial issues. 

Dr McNair said: “Research has shown that people require practical knowledge and psychological coping skills to make effective decisions.

"The toolkit we will develop aims to decrease the emotional distress people feel in relation to financial issues by helping them to develop better coping skills, challenging people to confront how they typically behave in certain situations, and by supporting people to overcome negative thoughts and behaviours.”

For more information:

Dr McNair is available for interview. Contact Guy Dixon, 0113 343 1028 or g.dixon@leeds.ac.uk

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