Charity Christians Against Poverty (CAP) has publishied new findings that show 93 per cent of clients stay free of problem debt years after receiving help.
The Freedom Report, to be delivered this evening an event in Parliament, contains information gathered from 214 phone interviews with people who had become debt free with the charity up to five years before.
The striking findings show that even among those who have had a Debt Relief Order (DRO), and have therefore had less time to learn how to budget, an astonishing 91 per cent remain debt free.
“It was so encouraging to make contact with our former clients and find out how they are getting on,” said Director of External Affairs Dawn Stobart, “especially when we discovered that the vast majority are still in a good situation.
“They told us how they were still successfully managing their money, sticking to a budget and have built up savings. They also described delight at achieving positive financial milestones, with many having bought cars, paid for weddings, got a mortgage, furnished their homes and one couple had even been on their first holiday in eight years. One lady described how she had been able to give her daughter the chance to attend her school prom.
“For those of us who see people at a real crisis point in their lives, it is hugely encouraging not just for CAP but for all of us in the sector, to hear the long-term positive impact we are able to make on people’s lives.”
Welcoming the report, Caroline Rookes, Chief Executive for the Money Advice Service (MAS) said “CAP’s Freedom Report embodies the combination of empathy and expertise that is essential to providing effective support to people with problem debt.
“This report spells out the impact that getting free, high-quality advice has on improving financial capability and avoiding debt problems recurring. The data collated in this report echoes the impact of debt advice services across the country in helping people to reduce their debts, take control of their finances and start planning for the future.”
Despite the average annual household income being just £14,511, more than eight in ten people still said they felt in control of their finances. Nearly half (46%) had been able to save money compared to life before CAP’s help when we know just one in ten had savings of any kind.
One DRO client said: “I found the experience with CAP excellent. They really helped me get back on my feet and told me about budgeting, which has been a really great help. I make my own budgets now.”
The knock-on effect on the people around them was apparent too, with six in ten (62%) passing on the skills they had learned to family, children, work colleagues and even absolute strangers – especially that of sticking to a budget.
Clients also spoke about their experiences with credit since becoming debt free. Three quarters (74%) of all respondents had not borrowed but of those who had 76% felt in control of their finances, suggesting that credit was being used responsibly.
CAP’s Patron, Archbishop Justin Welby, said the report was exciting: “CAP deals in helping people to get free of the prison of debt and this is something I feel passionately about.
“It’s easy to imagine that someone living with poor finances will always be in that state, that poverty is too big a problem for us all to tackle. This report is exciting because it shows that if someone gets the right level of support, they can conquer their debt problems – not just to become debt free, but also to stay in the black, without the need for expensive credit, successfully managing their household finances for years to come. It tells us that no matter how hopeless a situation can first look, significant change is possible.”