Indebtedness, Low Income and Financial Exclusion in Wales

As part of its first work programme, The Public Policy Institute for Wales (PPIW) was asked to look at the impact of debt on deprived communities and households.

The PPIW commissioned Dr Victoria Winckler, Director of the Bevan Foundation, to review the evidence on this; and specifically to see what is known about:

  • how many people in Wales are affected by over-indebtedness;
  • which neighbourhoods and which demographic groups are affected the most;
  • why low income households are more likely to be indebted; and
  • the extent to which the issue is one of financial exclusion.

Her report highlights how widespread indebtedness is in Wales – an estimated 16% of the population are over-indebted.

But it is a problem that affects some sections of society more than more others – households earning less than £20,000 a year account for around half of the total; and a significant number live in neighbourhoods with high levels of socio-economic deprivation.

Dr Winckler’s report explores what is known about why this is, and the role that financial exclusion plays. It offers a timely and valuable contribution to the policy debate on this set of issues.