Research identifies the biggest barriers to seeking financial help
Asked for a reason why they would not seek financial support, three in 10 (31%) UK adults said they didn’t think they would be eligible to receive it anyway, while over a fifth (22%) said they wouldn’t even know where to begin.
Research from Bluestone Mortgages, which sought to reveal the biggest barriers to seeking financial support, also found that one in six (16%) people would be too embarrassed to do it, and that 11% would be worried about the impact on their credit score.
At a time when nearly a quarter (24%) of UK adults are concerned about their mortgage repayments, the findings also reveal a lack of awareness and understanding of support options available.
Nearly a third (31%) said they had no awareness or understanding of how a financial organisation such as their lender or energy provider could help them if they ended up in financial hardship. Over half (52%) said they were not aware of government-backed support services such as MoneyHelper.
Read more: FCA to examine 40 firms over support for struggling borrowers.
“As the cost-of-living crisis continues to intensify, we expect to see a growing cohort of customers locked out of the mainstream mortgage market as they do not fit the ‘vanilla’ criteria,” Steve Seal (pictured), chief executive at Bluestone Mortgages, commented. “For those who find themselves in this situation, it’s important to remember that there is help at hand and early engagement is key.
“While many customers may be embarrassed to speak about the state of their finances, the earlier they can engage, the more tailored support they will receive. Whether that be support directly from the lender, or being signposted to a debt adviser who can help them get their finances back on track, it’s important that we, as an industry, highlight the support options available so that we can deliver a fair customer outcome which takes into account a borrower’s individual situation.”
Satnam Sidhu, mortgage expert at Haysto, agreed that advisers have a crucial role to play in supporting those who are embarrassed about their financial situation.
“The first task is to create a non-judgmental and safe place for the customer to discuss any life experiences and credit issues,” Sidhu said. “Doing this reduces the embarrassment and anxiety levels and helps focus on what the customer wants to achieve.
"Aside from adviser support, there needs to be greater emphasis on education across the industry to help increase financial awareness among individuals. Many people do not understand the impact of defaults, CCJ’s or debt management plans on their ability to obtain a mortgage.
“At Haysto, we strive to address this issue by providing support for individuals, so they know and understand their circumstances and options before making any decisions.”
