Published on:
09 June 2020
An additional £37.8 million to fund the provision of debt advice and other support for people suffering money difficulties in the wake of the coronavirus outbreak has been secured by the Money and Pensions Service (MaPS).
Early analysis by MaPS predicts the number of people needing help with debt will climb for at least the next 18 months – increasing by over 60% and peaking around the end of 2021*.
The funding will be managed by MaPS which has committed to the following:
MaPS will set out the process for allocating funds in the coming weeks.
The extra money is in addition to the existing MaPS budget for debt advice in 2020/21 of £64.6 million and will come from a combination of government funds, reallocated MaPS budget and an industry levy. MaPS is also working with the FCA to establish a fairer and more sustainable debt advice funding approach for the future.
In addition to the £37.8 million being announced by HM Treasury today, £5.9 million is also being allocated to Northern Ireland, Scotland and Wales because debt advice is a devolved matter.
Caroline Siarkiewicz, Chief Executive at the Money and Pensions Service, said:
“This pandemic is first and foremost a health emergency, but for many the longest lasting impact will be a financial one. Experience and evidence tell us that the number of people needing formal debt advice in the wake of a major event like this increases slowly at first but is then likely to grow for many months. When the greatest demand for debt advice hits, potentially in 18 months’ time, we need to be ready and that means acting now.
“Debt services are already over-subscribed so we’ll be working hard to help people early, before their financial situation gets too bad. We already have projects under way to help deliver debt advice differently, making better use of data and helping people find the advice that is available more efficiently. For people facing money struggles it’s important they know we are by their side to help them through – not just now, but for the many months to come.”
There is already help available for people facing financial difficulty in the wake of coronavirus. Here are some initial steps to take:
Caroline Siarkiewicz added:
“At a time of great stress for many, the additional impact on people’s financial wellbeing will be a difficult blow to take. The most important thing is that people avoid the temptation to ignore money problems. Whatever your circumstances, this is the time to check up on your household budget, use our money guidance tools to keep yourself on track, and seek help as soon as possible if you think you aren’t going to be able to meet your commitments.”
If you are struggling with debt, there are free services available to help you with options such as debt restructuring and repayment plans. You can find help using our debt advice locator tool."
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Debt advice is an FCA-regulated service offering personalised repayment plans and help with restructuring debts; money guidance offers more generic support and information about dealing with debt as well as tips on budgeting, saving and income maximisation.
PACE: Our Pilot of Adviser Capacity and Efficiency project is entering a six month phase, using technology to connect customers from several different creditor organisations, such as local authorities and financial services firms, with a virtual contact centre to put them straight through to a debt adviser at one of three different organisations, increasing efficiency and reducing delay. It will also utilise Open Banking technology and Credit Reference Agency data to increase speed and accuracy in serving people.
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