We need to break the link between life events and problem debt
Matt Hartley, the Money Advice Trust’s Director of External Affairs, on our new research on life events and financial difficulty
Posted October 19, 2026
Last week we published the Money Advice Trust’s new research on life events and financial difficulty - as we set out on a new long-term mission to weaken the link between the two.
Job loss, relationship breakdown, taking on caring responsibilities, experiencing illness: these life events are common, and they are the biggest driver of the financial difficulty for the people we help at National Debtline. But too often, the safety nets that we put in place as a society are either missing in action, or simply not strong enough to prevent serious problem debt.
Our new research, commissioned as part of our partnership with M&G and conducted by the University of Bristol’s Personal Finance Research Centre, explores in full the relationship between life events and financial difficulty and begins to sketch out the system change required from government, the private sector and civil society to help break this link.
Focusing on prevention
Over the 12 years I’ve been at the Money Advice Trust, our policy and campaigning work has largely focused on issues I would call ‘close to home’. Our aim, through painstaking policy and campaigning work, has been to use our evidence and expertise to make sure there are safe routes out of debt for people in financial difficulty, like the more than 200,000 people we help every year at National Debtline and Business Debtline.
We have deliberately chosen to focus our limited resources on these “downstream” policy issues, where we’ve been able to make the maximum difference.
Over the last decade we’ve helped improve local authority debt collection practices, secured bailiff reform, strengthened support for vulnerable customers and built the case for a debt options framework that no-one should be allowed to slip through. We’re proud of this work and other policy successes, large and small – and campaigning for safe routes out of debt will always be an important part of our work.
But for all the progress we’ve made across these familiar issues, we have felt a growing sense of frustration, and an urge to try and get “upstream” and start fixing some of the bigger, systemic issues that are leading people into problem debt in the first place.
That’s why we are now developing a new, more preventative, policy and campaigning agenda for the second half of the 2020s and into the next decade.
Why life events?
We know that life events are the single biggest driver of financial difficulty for the people we help – one in four National Debtline clients tell us a life event was the root cause of their financial problems.
The research that we launched at this week’s Fair4All financial inclusion conference – based on new polling and analysis of the FCA’s Financial Lives survey - confirms not only how common life events are, but also the strength of the link between life events and financial difficulty:
- More than half (52%) of adults aged 25-55 have experienced a major life event such as redundancy, serious illness, bereavement or relationship breakdown in the last 3 years
- 20% of those who had experienced any life event in the last 12 months have fallen into financial difficulty as a result
- And multiple life events in succession mean even more severe impacts – while 17% of people experiencing one life event fall into financial difficulty, this rises to 29% for two events and 40% amongst those hit by three or more
Despite this, only 7% of adults feel financially prepared for a major life event.
Low-income households, part-time workers, retail workers and the self-employed emerge from the research as particularly vulnerable with less access to safety nets (such as savings, sick pay and support from family and friends) than others.
Stronger safety nets
When it comes to solutions, one of the reasons we were so attracted to focus our new influencing agenda on life events is the many policy and practical levers available, which can be found not only in the realm of the state but in the private sector and civil society too.
The influencing team here at the Money Advice Trust have co-developed with Professor Sharon Collard and her colleagues at PFRC a set of broad recommendations which you can read in the report.
There are three that I would highlight as issues we are particularly keen to progress in the coming years.
The first is sick pay protection for self-employment – and the urgent need for the Government to plug this gap. By starting a business self-employed people have taken a risk, which we all benefit from. But they currently lack even the most basic protection afforded to those of us in employment, through Statutory Sick Pay.
For many of the people we help at Business Debtline, that kind of protection could have made a meaningful difference at a key moment. Our report flags up a couple of international examples – Canada and Denmark – as a good starting point.
The second solution I’m drawn to is access to income protection insurance which surely has a claim to being the most under-valued financial product out there. Only 18% of workers have income protection in place.
The FCA’s market study is finding that the market works well for consumers. The market is growing, but slowly, and access is an issue. We’ll be looking at ways that income protection could play a role in strengthening the safety nets for those least likely to have a policy in place, but most likely to benefit from one after a life event.
And the third recommendation I would highlight is a very practical one, which is the need to build stronger partnerships between debt advice and public services and charities that are doing outstanding work to support people who are experiencing specific life events.
It feels like there is a lot more we can do here – and for our part at the Money Advice Trust we are keen for this research to prompt conversations about what’s working well in this ecosystem, what isn’t, and how we can make sure different kinds of support layer over each other at these critical moments.
There is a lot to do.
We are grateful to Professor Collard and her co-authors Jamie Evans and Sara Davies for setting out the challenges so comprehensively, and to our partners M&G without whom this research would not have been possible. And I’d like to thank the team here at the Money Advice Trust – Grace Brownfield, Jasmin Dhaliwal, Meg van Rooyen, Ed Ware, Imogen Dalton and others – for bringing this new project into being.
We would love to know what you think. You can read the full report here and a summary here – do get in touch (policy@moneyadvicetrust.org) if you would like to have what we hope will be one of many conversations these findings spark.
Matt is the Trust’s Head of Public Affairs and Engagement and joined the charity in 2014. He leads the Trust’s influencing work and previously worked for StepChange Debt Charity, the Personal Finance Education Group and in Parliament. View all posts from Matt Hartley.
