This project is being funded as part of a Leverhulme Early Career Research Fellowship awarded to Simon McNair.
Background and Rationale
Financial strain is pervasive in the UK, underlining the need for effective financial support services.
Total personal debt in the UK was £1.43 trillion in November 2014, roughly £29,969 per UK-citizen (The Money Charity, 2015), amounting to 115% of average individual earnings. This figure has doubled in little over 10 years, and is projected to reach £2.25 trillion by 2019 (Office for Budget Responsibility, 2014).
Debt is the second most frequent issue dealt with by Citizens Advice Bureau, who assisted with 386,009 new debt-related issues April-June 2014 alone, and 6405 new debt issues every working day in the 12 months previous (Citizens Advice Bureau, 2014). Yet, current financial support does not account for how psychological barriers may compromise people’s capacity to take on-board, and effectively apply the more practical financial advice and guidance they receive from agencies such as Citizen’s Advice Bureau.
How people react to stress, or feelings of helplessness often may interfere with how people confront their financial issues, and undermine attempts to overcome these issues.
Responding to recent calls by the UK’s Money Advice Service for support agencies to better equip those experiencing financial difficulty with psychological coping skills, researchers at the Centre for Decision Research at Leeds University Business School are set to embark on a three-year project with partners at Citizens Advice Bureau in Bradford, and Leeds to develop more effective financial support service provision.
Project Aims and Objectives
Applying psychological theory concerning emotional influences on behaviour, the project objective is to develop, implement, and evaluate an auxiliary psychological advice tool to be deployed alongside current Bureau financial advice.
This tool aims to teach people simple, and effective psychological coping skills in areas such as stress management, self-efficacy, and emotional control in an attempt to mitigate the kinds of psychological barriers that may otherwise undermine the effectiveness of other, practical financial guidance people receive from Bureau advisors.
The project findings will contribute directly and authoritatively to recent and ongoing shifts in national policy recommendations made by policy organisations in the UK (Money Advice Service) and the US (Consumer Finance Protection Bureau) concerning developing more effective financial support services.
The initial phase of the project will entail working one-to-one with both Bureau clients and advisors to assess the most prevalent types of psychological concerns typically facing clients experiencing financial difficulty.
Phase two of the project will see these insights used as a foundation to inform the design and content of materials for the psychological tool.
The design of the programme will build on psychological theories of behaviour indicating that people need not only practical knowledge, but also psychological coping skills to make effective decisions.
With emerging evidence suggesting that issues of stress, self-esteem, and self-effectiveness affect those experiencing financial difficulty, the core of the programme will leverage principles from Cognitive Behavioural Therapy – a flexible form of psychological therapy that lends itself particularly well to self-administration.
The four-week programme aims to decrease the emotional distress people feel in relation to financial issues through helping people to develop more adaptive coping skills; challenging how people to confront how they typically behave in certain situations; and by supporting people to overcome self-defeating thoughts and behaviours.
To evaluate the programme’s effectiveness in improving people’s psychological, and financial outcomes, phase three of the project will see 200 Bureau clients take part in an eight-month longitudinal study, which will compare clients who do, and do not receive the programme in addition to standard Bureau financial guidance. The study will assess each group of clients prior to their initial Bureau appointment, and again at 6, and finally 12 weeks after their initial appointment. Clients’ development on a range of financial and psychological outcomes will be assessed.
You can watch the short video below to find out more about this project.
Dr Simon McNair
Leverhulme Early Career Research Fellow
Centre for Decision Research
Leeds University Business School
GM.45 Maurice Keyworth Building
Leeds LS2 9JT
T: +44 113 34 34518