Financial Insecurity in Great Britain: A Mixed Methods Analysis of Debt, Decision Making, and Financial Resilience Amongst Lone Parents

Abstract

Debt is a phenomenon that impacts many people in the UK and is a normative aspect of everyday life. In a shifting socioeconomic landscape marked by significant government welfare reforms, unstable labour markets, and high levels of debt, low-income individuals and families face considerable financial challenges. Among the most affected by these shifts are lone parents - predominantly women - representing one in four individuals seeking debt advice nationally. The existing policy framework and discourse emphasise individual financial management as the primary preventive measure against experiencing a debt burden (also known as problem debt or indebtedness). Concurrently, the concept of 'financial resilience' is often cited for how it can improve the financial experiences of vulnerable groups to navigate financial challenges effectively. However, the practical implications of these strategies for lone parents' ability to mitigate debt and enhance their financial resilience still need to be clarified. Against this backdrop, in this PhD research, I aim to shed light on these critical issues, focusing specifically on the experiences of lone parents to understand how they manage their finances, what impacts how they manage debt, and what determines their financial resilience. By foregrounding lone parents, the research acknowledges their unique position amidst the social and economic challenges in attempts to resolve their situation. This research aimed to understand how lone parents firstly manage their finances and secondly manage debt. To address the complex and multifaceted nature of lone parenthood, financial management, debt, and financial resilience, I employed a unique mixed-methods approach, integrating quantitative and qualitative methods using secondary data analysis. The first phase of the research involved analysing the Wealth and Assets Survey using bivariate and multivariate techniques to understand lone parents’ financial management and differences with other parents, the factors that impact how they manage debt, and their financial resilience. An explanatory research design was employed, wherein findings from the first phase informed the focus of the subsequent phase. The second phase of the research involved analysing interviews with lone parents and a focus group with practitioners at the forefront of government policy. Thematic analysis was applied to better understand how lone parents manage finances and debt and what impacts their financial decisions and lives. The findings highlighted that lone parents manage their finances more closely than other families, with more lone parents reporting keeping track of their finances than couple parents. Moreover, more lone parents also reported they struggle to make ends meet. The relationship was more pronounced for those with a low-income and for lone mothers. Further findings emphasised the increased risk of worsening finances on lone parents’ agency to manage debt effectively and plan. Financial resilience was varied across lone parents, with a large proportion actively avoiding formal debt yet having to pool resources to get by, particularly regarding access to social support. Although lone parents in this group sought practical ways to avoid debt, the social resources they accessed had the most significant impact. These findings reflect the multifaceted situations that can be adversely affected by carrying debt. Inequality and a lack of supportive labour market and welfare policies place a substantial burden on lone parents and often can make their choices extremely limited. In this thesis, I argue that it is not that low-income families like lone parents face issues with debt because they lack knowledge or skills since, in many cases, decisions are made to steer through these challenges. Rather, that circumstances, including a lack of access and opportunities to mobilise resources, have the most significant impact on managing debt. Experience with debt shapes life chances and affects future outlooks on finding a way out of debt, leaving many needing additional support. To conclude, I argue that policies that provide greater financial support to lone parents are essential to bolster their ability to avoid debt while maintaining a good standard of living. Interventions that increase social and communal support will likely provide positive, albeit modest, improvements to financial resilience among lone parents. Greater investment is needed in the advice sector to raise awareness of where to find support and to ensure that free communal services remain accessible. This will target help to the most vulnerable and encourage greater engagement with issues like debt within communal settings.

Date of Award	27 Jun 2024
Original language	English
Awarding Institution	The University of Manchester
Supervisor	Jacqueline Carter (Main Supervisor) & Sarah Marie Hall (Co Supervisor)