Money Advice Services in the UK

Norman Laws

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1. Overindebtedness - Nature And Extent

There have been numerous studies conducted into credit and debt in the U.K. during the past two decades. Of these, 'Credit and Debt - The PSI Report' (PSI Report) is probably the most comprehensive. The PSI report is based upon a detailed survey into 2,200 households' and 160 non-householders', use of credit and experience of debt, undertaken in 1979.

Although the findings are now 12 years out of date, the reports main findings on the six main explanatory factors for debt still appear to hold, namely: poverty, changing circumstances, Overcommitment, money management, reluctance to pay, and creditors' actions. The PSI report's analysis highlighted that 'none of these factors led to a high risk of debt on its own. It was a combination of characteristics which led to (debt) problems.'