Could you spot debt problems in friends and family?

Only 20% of those at risk of crisis debt seek help

young couple having...

New research from the Money Advice Service has found one in six adults are at risk of crisis debt – but only 20% of those people seek help.

As part of our #TalkMoneyWorries week, could you spot early warning signs to prevent problem debt among your friends and family?

See also: Problem debt could affect one in six adults

See also: Millions of Brits use credit cards to survive

Debt problems tend to build up over time, gradually getting to the point where finances reach crisis point. Often it's not until this late stage that the full situation becomes clear. Yet there are symptoms of debt which, if noticed, could make the difference at an earlier stage.

With one in six people at risk, there's a good chance you know someone struggling – even if they're trying to hide their problems. We're calling on friends and family to keep a look out for any of these signs and potentially intervene to show there's support out there, and to hopefully stop the debts getting out of control.

Symptoms of debt

It's not always easy to notice someone you know is struggling with problem debt. Often when people have money worries they hide them due to embarrassment or to protect their family. Or perhaps they just don't realise the severity of the situation – or want to admit it. But there are clues you can look out for.

Ask yourself if:

  • They have been in debt in the past
  • They have had a recent life event – an event that has resulted in a loss of income or higher spending for example having a baby, being made redundant, illness, divorce or a death in the family.
  • They are living beyond their means or over spending – they always seem to have the latest 'must have' items although they don't have the income to cover this.
  • They seem anxious, withdrawn or depressed – they have reduced time socialising, they are avoiding friends.
  • They may seem more secretive – starting to hide issues and avoiding talking about finances
  • They have changed their spending habits – either reducing spending (e.g. going on fewer holidays or eating out less) or overspending (spending without a plan for repayment for example putting luxury items on credit)
  • They seem tired or are having trouble sleeping
  • Their weight has changed suddenly – either increasing or decreasing

How to help friends you think might be struggling with debts

If you spot some of these signs, it doesn't necessarily mean there are debt issues – but if you think money problems could be the cause, there are three simple steps you can follow to help.

First up, start a conversation. Talk about your own personal experiences to get the conversation started – but make sure you keep the language non-judgemental.

Next up, let them know they aren't alone –there is help out there and it doesn't need to cost anything. There's easily accessible free debt advice available that can help them get their finances back on track. You could even offer to go along with them for support if it would help.

Finally, see if you can get them to take the Debt test on the Money Advice Service website. It helps them work out which option is the best bet to resolve their worries. It'll also find free debt advice option in their area.

Debt advice works

If your friend or family member isn't convinced there really is a way out, share with them some other Money Advice Service research. Within three months of receiving debt advice, two-thirds of people are either repaying their debts or have already fully cleared them.

There's also a big impact on their wellbeing, with close to three-quarters saying they feel less stressed about their finances, two-thirds sleeping better and over half saying they felt physically better too.

This article is provided by the Money Advice Service.