Debts: Government Assistance

Treasury written question – answered on 28th October 2021.

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Photo of Ruth Jones Ruth Jones Shadow Minister (Environment, Food and Rural Affairs)

To ask the Chancellor of the Exchequer, what recent steps he has taken to support people experiencing problem debt.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

The Government put in place an unprecedented package of support to help people during the COVID-19 pandemic, protecting livelihoods with the Self-Employment Income Support Scheme, the Coronavirus Job Retention Scheme, and temporary welfare measures. The Government also worked with mortgage lenders, credit providers and the Financial Conduct Authority to help people manage their finances with payment holidays, and took unprecedented action to support renters, ensuring that no-one was forced from their home during lockdown.

However, the Government recognises that the full impact of the pandemic on people’s personal finances is still unfolding and that some are struggling at this challenging time. To help people in problem debt get their finances back on track, the Government agreed to maintain record levels of funding for free-to-consumer debt advice in England in 2021-22, bringing this year’s debt advice budget for the Money and Pensions Service (MaPS) to £94.6 million. This is a more than 70% increase since 2019-20 to help more people who are struggling with their finances during the pandemic.

In addition to this, the Breathing Space scheme launched in England and Wales, offering people in problem debt a pause of up to 60 days on most enforcement action, interest, fees and charges, and encouraging them to seek professional debt advice.

The Government has also changed the existing monetary eligibility limits for a Debt Relief Order in England and Wales; increasing the value of assets that a debtor can hold, the level of surplus income received and the total debt allowable. This will give more people with low levels of assets and low income who are in problem debt access to a suitable and proportionate solution.

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