How to Use the Money Advice Service's Free Online Debt Test

Oct 5, 2011
Carol Finch

How Does the Debt Test on the Money Advice Service - Image by bredmaker

Worried about how much you owe and how it might affect your finances? This test can help assess if your debts are, or are likely to become, a problem.

Debt has a nasty habit of creeping up on us unawares. It may be manageable one day, but can turn into a problem overnight. This can all come down to a change in circumstance that is beyond your control or to the fact that you regularly increase your borrowing without paying back enough to keep things on an even keel. Severe problems may be easy to identify; it's not always so simple to see when you are heading into difficulties. The Money Advice Service's debt test may help.

What is the Debt Test?

This is a simple to use online tool targeted at UK consumers that was set up by the independent financial advisory service, the Money Advice Service (previously the Consumer Financial Education Body). It is 100% confidential, doesn't require in-depth financial information and takes only a few minutes to complete. Based on the kind of data that a credit reference agency would use to assess your credit/debt relationship, it can give a useful snapshot of the overall health of your finances and whether you need to change the way you manage your money.

You, Your Money and Your Debts

This test works on a multiple choice basis, giving you a fixed range of possible answers to each question. These are organised around subjects such as:

You: You'll need to input your age, living arrangements and marital status. The test also asks you to state if you are currently having debt problems.
Income: You'll need to input your weekly or monthly salary (after tax and deductions) and to give a guideline on how much money you have left at the end of each pay period once you have paid for essentials.
Financial accounts: You'll be asked if you have a bank account, mortgage and any credit or store cards. As the test goes on, you'll also need to state if you have applied for credit products in the last six months and to think about how many of your accounts overall were set up in the last 18 months.
Money management: This section asks how much you have to spend each month to pay back what you owe.You'll also have a box to tick if you have missed any payments in the last six months and will be asked questions about your credit limits, whether you use cash advances and how you handle your monthly card repayment(s).

Once you've answered these questions, you can click to go to a results page. This gives you an overview of your situation. So, for example, you might be told that you have no problems, that you should take action now because you may run into difficulties soon or that you need to do something now to deal with your debts.

How Accurate is the Money Advice Service Debt Test?

This test can be a valuable measure of how you are coping generally and whether you should take action. But, it should be treated as a guideline and not as a definitive judgement on the state of your finances – you are answering standard questions here that may not fit exactly with your circumstances. Saying that, if your feedback shows that you should make changes, then you can use your results page to access other information that could help you better deal with your debts.

If you wish to take a closer look at your finances in general, the service also offers a range of other useful interactive tools including a free financial healthcheck. At the end of the process, if you still aren't sure about the best solution to your problems, remember that there are independent UK debt agencies that can give you impartial and personalised advice free of charge.