"The FCA’s research into those struggling financially shows that many are not seeking support from their lenders when going into arrears because they feel a sense of embarrassment."
Its research found that some people who are struggling financially are not seeking support because they are embarrassed. 42% of borrowers who were struggling and ignored their lenders’ attempt to contact them had done so because they felt ashamed. In addition, two out of five people (40%) who were struggling financially incorrectly thought simply talking to a debt adviser would have a negative impact on their credit file.
However, 79% of people in financial difficulty who used debt advice would recommend it and 70% said it had been more helpful than they had anticipated.
More than half (52%) of borrowers in financial difficulty waited more than a month before seeking help. Of these, 53% regretted not doing so sooner. This feeling of regret became stronger the longer people waited after first experiencing difficulties, increasing to two in three (67%) among those who waited more than six months.
Karen Noye, mortgage expert at Quilter, commented: “Money continues to be a taboo subject, and this is particularly evident when it comes to debt. The FCA’s research into those struggling financially shows that many are not seeking support from their lenders when going into arrears because they feel a sense of embarrassment.
“Although understandable, burying your head in the sand is potentially the worst course of action when it comes to problem debt. There is a huge connection between mental and financial health, and it is always best to seek help otherwise as one aspect of your health deteriorates so does the other. The research reveals that 42% of borrowers who were struggling and ignored their lenders’ attempt to contact them had done so because they felt ashamed. Lots of people are struggling with the cost of living crisis at the moment and there should be no sense of shame when asking for help during one of the most turbulent financial periods for a long time."
