Britain in the Red
We have been commissioned by the TUC’s Economics Department to review existing aggregate and household survey data sources in order to better understand the current level and distribution of household debt and to bring forward policy proposals to address this. An interim report, which focused on the household survey data, was published in September 2015, and is available from the ‘Recommended Previous Projects’ tab on this page.
The final report will update the household survey analysis and review aggregate measures of household indebtedness, including the Debt to Income and Debt Servicing to Income ratios published by the Office for Budget Responsibility, as well as examining the extent to which households have deleveraged since 2008. It will particularly look at the growing importance of unsecured liabilities (consumer credit debts and student loans) in holding back Britain’s economic recovery.
Estimating the debt burden at the local level
With funding from Local Trust we are analysing demographic information and bank lending patterns across the Leicestershire sub-region to provide estimates of the local debt burden. This work is informed by our household survey analysis undertaken for the Britain in the Red project (above). As well as providing outputs for the Leicestershire sub-region we will provide a guide to help other localities conduct the exercise for their areas.
The provisional report from this project, which has been commissioned by the TUC’s Economics Deppartment and Unison, presents an analysis of household debt survey evidence and comments on observed changes in the distribution of unsecured debt in recent years. It particularly focus on findings from an analysis of the Bank of England’s annual household debt survey commissioned from NMG Consulting (‘the NMG survey’) for the period from 2010 through to the end of 2014.
During this time we find that:
- The number of over-indebted households increased by 28% to 3.2 million;
- Around half of these are ‘extremely over-indebted’, paying out more than 40% of their income to their creditors; and
- There were significant increases in the number of over-indebted households including someone in employment, and amongst younger and lower income households.
The report is available from the TUC’s website here.
Review of international insolvency systems | 2011
With funding from Esmee Fairbairn Foundation we undertook a desk based review of insolvency systems in the US, Canada, Germany, France and Scotland. We followed this with a workshop with international experts to design a set of to policy recommendations for the improvement of the system in England and Wales.
The results from this project are summarised in CfRC Director, Damon Gibbons’, chapter in McAteer, M. (2011) ‘A Nation Living on the Never Never: policy solutions to reduce Britain’s personal debt mountain’. Smith Institute. London. This is available from the Smith Institute website here.
We were commissioned by Manchester City Council to undertake a study of financial exclusion and worklessness in Greater Manchester and to make recommendations to improve support for people with financial problems to obtain and sustain employment. The project involved a literature review and the conduct of focus groups with both recently and long term unemployed people.
We found that financial problems distracted people from jobsearch; constrained their jobsearch activities; created disincentives to find work, and reduced the chances of people sustaining their employment.
The report proceeded to set out the key features needed to address these issues, including the systematic screening of people for financial problems by Jobcentre Plus and welfare to work agencies and the inclusion of debt advice within tailored packages of support for jobseekers.
The final report is available here.