• New Experian research explores the digital habits of those with debt problems
• Analysis of StepChange Debt Charity clients has revealed new insights about the financial behaviour of those taking steps to recover from problem debt
The study, conducted by Experian, found 88% are highly engaged with the online world, but a significant proportion, 40%, are also unlikely to be managing their money digitally. StepChange Debt Charity has identified the potential of new online tools which could help people build financial resilience and recover from problem debt.
The majority of those surveyed were found to be online enthusiasts. Mainly from lower income households, they are active social media users and are likely to regularly use digital entertainment services, such as gaming and video streaming websites, but are much less likely to engage with fintech tools – including online banking services.
Age was identified as the biggest influencer of digital engagement. 14% of StepChange Debt Charity clients are people who now have young families. This group was found to be the most likely to use online banking and digital money management tools.
In comparison, around 12% of clients were found to be older people and retirees. This group is the most unlikely to use online financial management tools and have little interest in accessing these services digitally.
Digital money-management tools can help people in difficulty to save money and gain a framework for money management that might help them to avoid or reduce the impact of a financial crisis.
Experian and StepChange Debt Charity will now continue to work together to offer further insights, building further understanding of ongoing challenges, and look at potential solutions of how clients might gain better control of their money. The charity is about to launch a new online hub to help people with persistent credit card debt.
Peter Tutton, Head of Policy, Research and Public Affairs at StepChange Debt Charity, said : “No-one is pretending that digital tools can solve the nation’s debt problems, but they can certainly help, and there is the potential for new services that can better engage those who are financially insecure.
“Although most people who get into debt are in that situation because of a change in circumstances, helping people to manage their money and build financial resilience as a matter of routine means that they are likely to be in a better position to weather shocks if and when they do occur.”
James Jones, Head of Consumer Affairs at Experian, said : “It would be easy to think that today we are all using digital technology for the same things and at the same rate of consumption. However, what we’ve discovered is that clearly isn’t the case.
“Fintech tools are transforming the way many of us manage money. However, it’s clear from our findings that a significant chunk of people seeking help with problem debt appear reluctant to use online financial tools, which poses an interesting challenge for the debt advice sector and society at large.”
