We survey a representative sample of UK consumers on their understanding of core ‘financial literacy’ concepts in consumer credit. We find levels of financial literacy are generally low in the population. We also find levels of financial literacy are on average actually lower among those who...

Using individual-level panel data, this paper examines the relationship between subjective unemployment expectations and psychological health. Individuals expecting to become unemployed within the next year exhibit higher rates of suffering from anxiety plus worse psychological health based on...

We use UK survey data incorporating measures of financial literacy and behavioral characteristics to analyze the puzzling co-existence of high cost revolving consumer credit alongside low yield liquid savings in household balance sheets, which we term the ‘co-holding puzzle’. Approximately...

We use survey data from a sample of UK households to analyse the association between financial literacy and consumer credit portfolios. Among users of consumer credit there is much variation in levels of financial literacy. Borrowers with poor financial literacy hold higher shares of high cost...

We utilise questions concerning individual ‘debt literacy’ incorporated into market research data on households’ unsecured debt positions to examine the association between consumer credit and individual financial literacy. We examine the relationship between individual responses to debt...

Using individual-level panel data, this paper examines the relationship between problem debt and psychological health. Individuals exhibiting problem debt, by either subjective or objective measures, also exhibit much worse psychological health, by either subjective or objective measures....

The ‘financial accelerator’ model when applied to households states that shocks to household balance sheets (primarily changes in house prices) amplify fluctuations in consumer spending by tightening or relaxing collateral constraints on borrowing. We construct an alternative model where...

Recent household financial models predict that collateral-constrained households are more likely to increase debt-financed spending in response to rising house values. We augment this model to consider the use of unsecured debt such as credit cards. Using household panel data, we consider...

Movements in house prices and consumer spending are closely correlated in many developed nations. Much debate exists on whether this relationship is in any way causal arising from either wealth effects or collateral effects. This paper uses a unique survey question on self-reported responses to...

Using household panel data, this paper examines the impact of income uncertainty and house price uncertainty on home ownership in the United Kingdom. The existing literature based on cross-sectional studies finds a negative relationship between income uncertainty and home ownership. This paper...