Breaking the anxiety avoidance cycle

Having money worries is a reality many people will face at some point in their lives. According to the FCA, 8% of adults (4.5 million) were in financial difficulty because they had fallen behind on three or more household bills or credit payments in the past six months.

And in a decade shaped by the cost-of-living crisis, it’s not hard to see why. Even a small change in circumstances — such as an illness, a cut in hours or an unexpected bill — can be enough to push people  into debt they can’t pay back.

But the issue isn’t just the debt itself. It’s the avoidance that often follows.

Research from the debt advice charity StepChange shows that more than half of people struggling with their finances waited over a year before getting help. In another study carried out by StepChange, nearly 90% said creditor communications triggered negative feelings such as shame, anxiousness, or helplessness.

This creates what psychologists call an anxiety avoidance cycle. Essentially, a trigger appears, anxiety rises, and avoidance follows. Ignoring the problem brings immediate relief - and that relief teaches the brain that avoidance ‘works’.

So how can providers help to break this cycle, and better support customers who are struggling with debt?

The anxiety avoidance cycle

Source: Center for Effective Treatment (2025), The Anxiety Avoidance Cycle.

Why do people avoid debt communications?

Shame makes people shut down

Shame is one of the most powerful drivers of withdrawal. When someone feels they’ve fallen short, even when it was outside of their control, the emotional threat can disrupt their ability to think clearly or take action. For many, a letter from a creditor doesn’t feel like information - it feels like judgement. Avoiding it becomes a form of emotional self-protection.

Cognitive biases can push people to delay decisions

Even when people want to engage, certain cognitive biases make avoidance more likely.

• Loss aversion. People naturally react more strongly to situations where they might lose something - as opposed to situations where they might gain the same amount.

  For example, if you have £100 and lose £50, you’re likely to feel worse than if you had £0 and gained £50.

  For someone in debt, this plays out when opening a letter from a creditor feels like a potential ‘loss’ — penalties, bad news, or further complications. The immediate emotional cost can outweigh the long-term benefit of taking action, making avoidance feel like the safer option.

• Present bias. When people are under financial pressure, the immediate situation can feel overwhelming. Reading a long letter, making a phone call, or completing a form all carries an emotional load. Putting it off provides immediate relief — even if delaying action can make things worse later on.

How lenders can help customers break the cycle

You can’t force customers to take action – but you can design communications that interrupt the avoidance cycle rather than feeding into it. Here are our top three tips:

1. Make the first step feel achievable. When someone is overwhelmed by debt, even simple tasks can feel huge. Providers can help reassure customers by making the very first step feel quick, easy, and low pressure. For example:

   ‘You don’t need to prepare anything – simply get in touch and we’ll guide you.’

   ‘Your first conversation is just to understand your situation – you don’t need to make a decision today.’

2.  Focus on positive actions, not negative consequences. Communications that open with warnings or consequences can trigger shame and make people feel powerless. Instead, you can help customers feel more in control by highlighting the actions they can take. Focusing on positive steps encourages engagement, rather than shutting it down. For example:

   ‘You can choose the option that works best for you.’

   ‘We can help you find a way forward.’

3. Be specific about how you can help. Vague statements such as ‘We can help you with repayments’ can leave customers unsure of what to do, which increases the chance that they will delay action. Clear, step-by-step guidance can build confidence and encourage earlier engagement. For example:

   ‘We can offer you three options: a temporary payment plan, a reduced payment for three months or a short breathing space. We’ll talk you through each one so you can choose what works best for you.’

Sources

FCA 2024 Financial Lives Survey.

StepChange (2022), ‘Mixed Messages’.

Gilbert, P. (1997), The evolution of social attractiveness and its role in shame, humiliation, guilt, and therapy.

Lewis, H. B. (1971), Shame and guilt in neurosis.